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Focus Minerals Limited
ABN 56 005 470 799
Annual Report
For the year ended 31 December 2015
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Corporate Directory ABN 56 005 470 799
Directors
Dianfei Pei Chairman - Non-Executive, Non-Independent
Yuhuan Ge Director - Non-Executive, Non-Independent
Wanghong Yang Director – Executive
Gerry Fahey Director - Independent
Peter Hepburn-Brown Director - Independent
Zaiqian Zhang Alternate Director to Dianfei Pei - Executive
Company Secretary
Dane Etheridge
Registered and Head Office
Level 2
159 Adelaide Terrace
East Perth WA 6004
PO Box 3233
East Perth WA 6892
Tel: +61 (0) 8 9215 7888
Fax: +61 (0) 8 9215 7889
Share Registry Auditor
Computershare Investor Services Pty Ltd PricewaterhouseCoopers
Level 11, 172 St Georges Terrace 125 St Georges Terrace
Perth WA 6000 Perth WA 6000
Bankers Solicitors
National Australia Bank Murcia Pestell Hillard Lawyers
100 St Georges Terrace Suite 183, Level 6
Perth WA 6000 580 Hay Street, Perth, WA 6000
Bank of China Perth Branch Jackson McDonald
Ground Floor, 179 St Georges Terrace 225 St Georges Terrace
Perth WA 6000 Perth WA 6000
Industrial and Commercial Bank of China Stock Exchange Listing
Level 28, 44 St Georges Terrace Australian Securities Exchange (ASX)
Perth WA 6000 ASX Symbol: FML
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Contents
Corporate Directory ...................................................................................................................... 2
Chairman’s Report ........................................................................................................................ 4
Operations Review ........................................................................................................................ 5
Mineral Resources ........................................................................................................................ 7
Corporate Governance Statement ............................................................................................... 8
Directors’ Report ......................................................................................................................... 16
Auditor’s Independence Declaration ......................................................................................... 31
Financial Statements .................................................................................................................. 32
Directors’ Declaration ................................................................................................................. 36
Independent Auditor’s Report .................................................................................................... 66
Shareholder Information ............................................................................................................ 68
Interest in Mining Tenements ..................................................................................................... 69
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Chairman’s Report
Dear Shareholders,
It gives me great pleasure to present to you the Annual Report of Focus Minerals Limited for 2015.
Through the efforts of our employees, your Company has continued to work towards increasing the size and
quality of our Mineral Resources to enable a sustainable and profitable restart of operations and Coolgardie
and Laverton.
During the year, we announced a maiden high grade Mineral Resource at Bonnie Vale which we continue to
work on. We also identified what we believe to be a significant gold system at Karridale. While working on
these discoveries your Company has progressed several other exciting prospects which we hope will bear fruit
in 2016.
Thanks to our employees’ disciplined cost control and ongoing search for innovative efficiencies, your
Company has ensured the vast majority of its net cash outflow for the year was directly related to exploration.
During the year your Chairman, Jisheng Lu, resigned from the Board. As Chairman, he successfully guided
your Company through its transition into a lean exploration company. I thank him for his service and wish him
well for his future endeavours.
In my first few months as your Company’s new Chairman, I have been impressed by the professionalism of
my fellow Directors and our employees. I wish to thank them all for their dedication in 2015. On behalf of the
Board I would also like to thank and acknowledge your support as a shareholder.
Yours faithfully,
Dianfei Pei
Chairman of the Board
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Operations Review
Overview
In 2015, Focus Minerals continued to support its exploration strategy by investing over $8 million in its drilling
campaigns with over 57,000m drilled on the Laverton and Coolgardie tenements. Moreover, the Company was
delighted to announce the maiden high-grade resource at Bonnie Vale (117,000oz @ 16.9g/t).
Focus had adopted a simplified and disciplined approach to all of its business activities, achieving cost saving
through increasing productivity. The Company conducted internal reviews and obtained a cash refund of
$1.742 million from the ATO for unclaimed taxes dating back to 2007. The full-year loss for 2015 was $2.830
million, which was 88% lower than 2014.
Exploration
Focus’ exploration strategy aims to extend and improve the Company’s current known resources and discover
new ore bodies. In 2015, the Company drilled a total of 776 exploration holes for a total of 57,398.6m across
its Laverton and Coolgardie projects.
At Laverton, a total of 320 holes for 21,150.5m of drilling was completed. The main focus was the drilling in
the Karridale area. The best results from the Laverton drilling included:
8.0m @ 27.46 g/t Au from 425m in KARC154
1.0m @ 60.50 g/t Au from 51m, 3.0m @ 17.33 g/t Au from 69m and [email protected] g/t Au from 114m in
KARC156
2.0m @ 8.78 g/t Au from 145m and 8.1m @ 10.05 g/t Au from183.4m in KARC158
3.0m @ 25.13 g/t Au from 274m in KARC163
3.1m @ 11.43 g/t Au from 146.9m in KARC165
In addition to the drilling conducted at Laverton during the year, a 603 line kilometre airborne geophysical
survey was flown over 9 tenements in the Burtville area. Multiple structural targets in areas of transported
regolith cover have been identified from this work.
A separate, two square km, Sub-Audio Magnetic (SAM) ground survey covered the Karridale Project and its
extensions. Lines were at 100m spacing in two orthogonal directions (east–west and north–south), with
additional 50m infill line spacing collected over KARD154 and its arsenopyrite intersection. The SAM survey
highlighted the thrust fault surfaces that delineate the Karridale and Boomerang historic mines, allowing
improved drill targeting.
At Coolgardie, a total of 304 holes were drilled for 26,683m, this included the exploration work conducted at
Bonnie Vale, Brilliant, New Australia, Bayleys Extension as well as a regional Slimline RC program.
The Company’s 2015 drilling at Bonnie Vale continued to intercept the high grade gold mineralisation which
included:
2.0m @ 12.84 g/t Au from 229m in BONC064
1.0m @ 10.41 g/t Au from 334m in BONCD065
5.5m @ 11.81 g/t Au from 223m in BONCD066
1.0m @ 10.43 g/t Au from 111m and 3.7m @ 10.48 g/t Au from 151.3m and 2.5m @ 13.88 g/t Au from
181m in BONDD068
2.0m @ 14.18 g/t Au from 118m in BONC070
2m @ 17.52g/t Au from 134m in BONC090
4m @ 14.31g/t Au from 117m in BONC114
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In November 2015, a maiden high grade mineral resource at Bonnie Vale was released. The JORC 2012
Bonnie Vale Mineral Resource tabulation for Indicated and Inferred material above 3.0g/t gold cut-off is shown
in Table 1 below for the Main Quarry Reef:
Classification Tonnes Grade (g/t Au) Resource (Oz)
Indicated 113,000 16.8 61,000
Inferred 102,000 17.0 56,000
Total 215,000 16.9 117,000
Table 1: Bonnie Vale Mineral Resources by Resources Category at 3.0g/t Au cut-off
In addition, a regional slimline RC programme was completed with prospects drilled in the vicinity of the Tindals,
Forrest, Norris and Malaga prospects, some new gold mineralisation zones have been identified, in particular
the results from Possum South which included 1m @ 25.0 g/t Au from 7m and 1m @ 3.77 g/t Au from 11m in
FCSL129.
Operating Result
On 22 May 2015, the Company completed a share consolidation through the conversion of 50 fully paid
ordinary shares into one fully paid ordinary share.
The Company incurred a loss of $2.830 million for the year ended 31 December 2015 (12 months to 31
December 2014 loss: $23.370 million).
At 31 December 2015, the Company has cash, cash equivalents and short-term deposit (excluding
environmental performance bonds) of $57.610 million (31 December 2014: $65.782 million).
Net cash inflow from operations for the year ended 31 December 2015 totalled $0.002 million (12 months to
31 December 2014: $ 8.808 million outflow).
There were no issues of capital during the year ended 31 December 2015. On 28 February 2016, a total of
300,000 options to acquire shares at an exercise price of $2.50 lapsed.
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Mineral Resources
31 December 2014 Measured Resources Indicated Resources Inferred Resources Total Resources
Tonnes '000t
Grade Au g/t
Ounces Tonnes
'000t Grade Au g/t
Ounces Tonnes
'000t Grade Au g/t
Ounces Tonnes
'000t Grade Au g/t
Ounces
COOLGARDIE GOLD PROJECT
Tindals Project - UG 268 4.5 39,000 1,717 3.9 216,000 309 3.8 37,500 2,294 4.0 292,500
Tindals Project - Surface 7,802 2.1 537,500 3,098 2.2 216,500 10,900 2.2 754,000
Tindals Project 268 4.5 39,000 9,519 2.5 753,500 3,407 2.3 254,000 13,194 2.5 1,046,500
Bonnie Vale Project 113 16.8 61,000 102 17.0 56,000 215 16.9 117,000
Lindsays-Bayleys Project 4,350 1.7 238,000 3,327 2.1 229,000 7,677 1.9 467,000
Three Mile Hill Project 2,692 1.6 137,000 795 1.4 36,000 3,487 1.5 173,000
Norris Project 2,440 2.2 169,000 2,440 2.2 169,000
Total Coolgardie 268 4.5 39,000 16,674 2.2 1,189,500 10,071 2.3 744,000 27,013 2.3 1,972,500
LAVERTON GOLD PROJECT
Barnicoat Project 390 1.7 21,000 2,486 1.7 135,000 1,803 1.3 74,000 4,679 1.5 230,000
Burtville Project 1,207 1.4 54,000 708 1.8 41,500 1,915 1.5 95,500
Central Laverton Project 2,749 2.0 176,500 642 1.9 39,500 3,391 2.0 216,000
Chatterbox Project 531 2.2 38,000 3,923 2.1 270,000 3,235 2.2 232,000 7,689 2.2 540,000
Jasper Hills Project - UG 84 4.6 12,000 101 4.0 13,000 185 4.3 25,000
Jasper Hills Project - Surface 370 1.9 22,000 1,326 1.5 64,000 743 1.9 45,000 2,439 1.7 131,000
Jasper Hills Project 370 1.9 22,000 1,410 1.7 76,000 844 2.1 58,000 2,624 1.9 156,000
Lancefield Project - UG 2,037 6.5 427,000 619 7.1 141,000 2,656 6.7 568,000
Lancefield Project - Surface 72 3.9 9,000 94 6.3 19,000 166 5.2 28,000
Lancefield Project 2,109 6.4 436,000 713 7.0 160,000 2,822 6.6 596,000
Total Laverton 1,291 2.0 81,000 13,884 2.6 1,147,500 7,945 2.4 605,000 23,120 2.5 1,833,500
TOTAL MINERAL RESOURCES 1,559 2.4 120,000 30,558 2.4 2,337,000 18,016 2.3 1,349,000 50,133 2.4 3,806,000
Competent Person’s Statement
The information in this announcement that relates to Mineral Resources is based on information compiled by Michael Guo (P Geo) who is a member of the Association of Professional Geoscientists of Ontario,
Canada, which is a Recognised Professional Organisation (RPO). Mr Guo is employed by Focus Minerals Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves”. Mr Guo consents to the inclusion in this announcement of the matters based on the information compiled by him in the form and context in which it appears.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed
since it was last reported.
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Corporate Governance Statement
This statement outlines the main corporate governance practices that were in place for the year ended 31
December 2015. This statement explains the extent to which the Company complies with the ASX Corporate
Governance Principles and Recommendations 3rd Edition, including explanations of why certain
recommendations have not been followed. For ease of comparison with the Principles and Recommendations,
this statement summarises Focus’ compliance with each of the 29 specific recommendations. This statement
and summaries of Focus’ key governance policies, can be found at:
http://www.focusminerals.com.au/investors/governance/
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1: A listed entity should disclose:
(a) the respective roles and responsibilities of its Board and management; and
(b) those matters expressly reserved to the Board and those delegated to management.
Compliant
The Board is responsible for ensuring that the Company is managed in a manner which protects and enhances
the interests of its shareholders and takes into account the interests of all stakeholders. This includes setting
the strategic direction for the Company, establishing goals for management and monitoring the achievement
of these goals. A summary of the key responsibilities of the Board include:
Strategy – Providing strategic guidance for the group, including contributing to the development of and approving the corporate strategy;
Financial performance – Approving budgets, monitoring management and performance;
Financial reporting and audits – Monitoring financial performance including approval of the annual and half year financial reports and liaising with the external auditors through the Audit and Risk Committee;
Leadership selection and performance – Appointment, performance assessment and removal of the Chief Executive Officer. Ratifying the appointment and/or removal of other senior management including Company Secretary and other Board members through the Remuneration and Nominations Committee;
Remuneration – Management of the remuneration and reward systems and structures for senior management and staff through the Remuneration and Nominations Committee;
Risk management – Ensuring appropriate risk management systems and internal controls are in place, through the Audit and Risk Committee; and
Relationships with exchanges, regulators and continuous disclosure – Ensuring the capital markets are kept informed of all relevant and material matters ensuring effective communication with shareholders and stakeholders.
The Board has delegated to executive management responsibility for developing in the first instance:
Strategy – Assisting in developing and implementing corporate strategies and making recommendations;
Leadership selection and performance – selecting a short list of final candidate management and staff and proposing terms of appointment and evaluating performance;
Budgets – Developing the annual budget and managing day-to-day operations within budget;
Risk management – Maintaining risk management frameworks with periodic review by the Risk Committee; and
Communication – Keeping the Board, shareholders and market informed of material events.
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Recommendation 1.2: A listed entity should:
(a) undertake appropriate checks before appointing a person, or putting forward to security
holders a candidate for election, as a director; and
(b) provide security holders with all material information in its possession relevant to a decision
on whether or not to elect or re-elect a director.
Compliant
The Company, through the Remuneration and Nominations Committee and with the assistance of professional
recruitment agencies, conducts in-depth assessments of potential director candidates. When directors are
nominated for election or re-election shareholders are provided a summary of the individual’s relevant
professional background sufficient to enable an informed decision.
Recommendation 1.3: A listed entity should have a written agreement with each director and senior
executive setting out the terms of their appointment.
Compliant
The Company has established a process whereby all new directors will agree all significant details of their
duties and responsibilities. Prior to the year to which this corporate governance statement applies, directors
were informed of the terms of their engagement but the key responsibilities were taken to be strictly in line with
statutory and best practice expectations of directors.
Recommendation 1.4: The Company Secretary of a listed entity should be accountable directly to the
Board, through the chair, on all matters to do with the proper functioning of the Board.
Compliant
The Company Secretary is hired by and is directly accountable to the Board on matters relating to the proper
functioning of the Board.
Recommendation 1.5: Gender Diversity
Not Fully Compliant
The Company’s policy regarding Equal Employment Opportunity & Diversity is set out on the Company’s
website and available upon request. The policy does not include measureable diversity objectives as the Board
believes that the Company will not be able to successfully meet meaningful objectives given the size and stage
of development of the Company.
Recommendations 1.6: A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the Board, its committees and individual directors; and
(b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Compliant
In future years, the Remuneration and Nominations Committee will conduct an annual review of the Board
composition and performance of the Board as a whole, the Chief Executive Officer, Company Secretary and
senior executives. This review will include:
Determining the appropriate balance of skills and experience required to suit the Company’s current and future strategies;
Comparing the above requirements against the skills and experience of current directors and executives;
Assessing the independence of each director;
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Measuring the contribution and performance of each director;
Assessing any education requirements or opportunities; and
Recommending any changes to Board procedures, committees or the Board composition.
The Board is presently undergoing a review of its processes regarding Board and senior executive evaluation
and no such formal review was undertaken during the year.
Recommendation 1.7: A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of its senior
executives; and
(b) disclose, in relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process.
Compliant
The Board is presently undergoing a review of its processes regarding Board and senior executive evaluation.
The current evaluation processes is described below.
The Remuneration and Nominations Committee will conduct an annual review of the Board composition and
performance of the Chief Executive Officer, Company Secretary and senior executives. This review includes:
Determining the appropriate balance of skills and experience required to suit the Company’s current and future strategies;
Comparing the above requirements against the skills and experience of current directors and executives;
Assessing the independence of each executive; and
Assessing any education requirements or opportunities;
The Board meets annually to review the performance of senior executives. This review includes:
The performance of the senior executive in supplying the Board with information in a form, timeframe and quality that enables the Board to effectively discharge its duties;
Feedback from other senior executives;
Any particular concerns regarding the senior executive; and
Remuneration objectives.
The Board is presently undergoing a review of its processes regarding Board and senior executive evaluation
and no such formal review was undertaken during the year.
Principle 2: Structure the Board to add value
Recommendation 2.1: Establish a Nomination Committee
Compliant
The Company did not fully comply with this recommendation in the year ended 31 December 2015. The
Remuneration and Nominations Committee comprised four directors, all of which were non-executive.
However, as two of four were independent directors, there was not a strict majority of independent directors
on the committee. The composition of the committee and a record of its meetings is set out in the Directors
Report section of the Annual Report.
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Recommendation 2.2: Have and disclose a Board skills matrix
Not Fully Compliant
As part of the Board performance review mentioned in the discussion of recommendations 1.6 and 1.7, the
Company will develop a new Board skills matrix that effectively maps the skills held by individual directors and
the whole Board against the skills deemed most important to achieve shareholder value.
Recommendation 2.3: Independent Directors
Compliant
The Board has accepted that an Independent Director is as defined in Box 2.3 of the ASX Corporate
Governance Principles and Recommendations (3rd Edition).
Of the current Board members, Mr Gerry Fahey and Mr Peter Hepburn-Brown are the two directors considered
to meet the criteria as an Independent Director.
The length of service of each director are set out in the Directors’ Report.
Recommendation 2.4: A majority of the Board of a listed entity should be Independent Directors
Not Compliant
The structure of the Board does not comply with this recommendation in that a majority of the directors are not
independent. During the year ended 31 December 2015 the Board consists of one executive director, Mr Yang,
two independent directors, Mr Fahey and Mr Hepburn-Brown, and two non-executive directors, Mr Lu and Mr
Ge. Mr Lu was the Chairman.
The Board has nevertheless determined that the composition of the current Board represents an appropriate
mix of directors that have a range of qualifications and expertise enabling them to understand and effectively
deal with issues faced by the Company. Though not considered independent for the purposes of this
recommendation, the non-executive directors can effectively review and challenge the performance of
management. The Board is satisfied that all directors bring an independent judgment to bear on Board
decisions. In addition, each director is entitled to seek independent professional advice at the Company’s
expense on matters directly related to his director responsibilities, in accordance with Company’s constitution.
The Board’s structure and composition will be reviewed as and when its scale, strategic direction or activities
change. The Company will only recommend the appointment of additional directors to the Board where it
believes the expertise and value added outweighs the additional cost.
Recommendation 2.5: The chair of the Board of a listed entity should be an independent director and,
in particular, should not be the same person as the CEO of the entity.
Not Complaint
The Company’s Chairman throughout the year was Mr Lu, a non-executive but non-independent director.
However, the Board believes that Mr Lu was able to and does bring expertise and independent judgment to
all relevant issues falling within the scope of his role as Chairman.
Recommendation 2.6: Director induction and professional development
Compliant
New directors are inducted into the Company’s processes and policies in a suite of ways, including the
provision of a ‘Board manual’, interviews with senior management to build awareness of the issues facing the
business, and out of session meetings with other directors. All directors are encouraged to undertake ongoing
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professional development both in their area of technical expertise and in the skills required to effectively
execute the role of director.
Principle 3: Act ethically and responsibly
Recommendation 3.1: A listed entity should:
(a) have a code of conduct for its directors, senior executives and employees; and
(b) disclose that code or a summary of it.
Compliant
The Company has developed a Code of Conduct (the Code) which has been fully endorsed by the Board and
applies to all Directors and employees. The Code is regularly reviewed and updated as necessary to ensure
it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain
confidence in the Company’s integrity. A summary of the Code is available on the Company’s website and
upon request.
The Code sets out Focus’ commitment to conducting its business in accordance with all applicable laws and
regulations while demonstrating and promoting the highest ethical standards.
The Board encourages all stakeholders to report unlawful/unethical behaviour and provides protection for
those who report potential violations in good faith.
Principle 4: Safeguard integrity in corporate reporting
Recommendation 4.1: Audit Committee
Not Compliant
The Company does not fully comply with this recommendation in that the Audit and Risk Committee comprised
of only two independent directors throughout the year which was not a strict majority, though the members
were all non-executive and it is chaired by an independent director. The composition of the committee, a record
of its meetings, and the relevant experience of each member of the committee is set out in the Directors ’
Report. The Audit and Risk Committee charter is being revised in 2016, the current version is available on the
Focus Minerals website and upon request.
In the coming year, the Company is expected to fully comply with the recommendation, as a new independent
director has been recruited and joined the committee.
Recommendation 4.2: CEO and CFO declaration on the financial records
Compliant
The Board has received written confirmation from the CEO and CFO that Focus’ financial records have been
properly maintained and that the financial statements comply with the appropriate accounting standards and
give a true and fair view of the financial position and performance of the entity and that the opinion has been
formed on the basis of a sound system of risk management and internal control which is operating effectively.
Recommendation 4.3: The external auditor should attend the AGM and be available to answer
questions from security holders relevant to the audit
Compliant
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A partner of PwC, the Company’s auditor during the year, was available at the most recent AGM and w ill be
available at the next AGM to answer questions from shareholders. It is the policy of the Board to always request
auditor presence at AGMs.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1: Continuous disclosure policy
Compliant
The Company’s Continuous Disclosure Policy sets out the obligations of the Company’s directors, officers,
employees and consultants in relation to continuous disclosure as well as the Company’s obligations under
the Corporations Act and the ASX Listing Rules. The policy also contains procedures for internal notification
and external disclosure, as well as procedures for promoting understanding of compliance with the disclosure
requirements and for the monitoring of Company compliance.
The policy is currently being updated and a summary of the current policy is available on the Company’s
website and upon request.
Principle 6: Respect the rights of security holders
Recommendation 6.1: A listed entity should provide information about itself and its governance to
investors via its website
Compliant
Investors and other stakeholders can find information about the Company on its website
http://www.focusminerals.com.au/. Information on the Company’s corporate governance practices can be
found at http://www.focusminerals.com.au/investors/governance/
Recommendation 6.2: A listed entity should design and implement an investor relations program to
facilitate effective two-way communication with investors
Compliant
The Board places significant importance on effective communication with shareholders.
Information is communicated to shareholders through the distribution of the annual and half yearly financial
reports, quarterly reports on activities and cash flows, announcements through the ASX and the media, on the
Company’s website and through the Chairman’s address at the Annual General Meeting.
In addition, news announcements and other information are sent by email to all persons who have requested
their name to be added to the Company’s email list. If requested, the Company will provide general information
by email, facsimile or post.
Through the Company’s information email address and phone number, and at AGMs, the Company
encourages two-way communication with shareholders.
Recommendation 6.3: Disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders
Compliant
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The Company facilitates and encourage participation at meetings of security by having sections of each
meeting dedicated to questions from the floor. Shareholders are given at least 30 days’ notice of security holder
meetings and those that are unable to attend in person may email or fax questions they would like answered.
The Company provides a direct voting facility to allow security holders to vote ahead of AGMs without having
to attend or appoint a proxy.
Recommendation 6.4: Give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically
Compliant
News announcements and other information are sent by email to all persons who have requested their name
to be added to the Company’s email list. If requested, the Company will provide general information by email,
facsimile or post.
Principle 7: Recognise and manage risk
Recommendation 7.1: Risk committee
Not Fully Compliant
The Board has expanded the scope of the Audit and Risk Committee to include monitoring the Company’s
business risks. The management of business risks also addresses asset, operational, regulatory compliance,
personal health, safety and environmental risks.
The Audit and Business Risk Committee monitors the performance of risk management and internal control
systems and reports to the Board on the extent to which it believes the risks are being managed and the
adequacy and comprehensiveness of risk reporting from management.
The Company does not fully comply with this recommendation in that the Audit and Risk Committee comprised
two independent directors throughout the year which was not a strict majority, though the four members were
all non-executive and it is chaired by an independent director. The composition of the committee, a record of
its meetings, and the relevant experience of each member of the committee is set out in the Directors Report.
The Audit and Risk Committee charter is being revised in 2016, the current version is available on the Focus
Minerals website and upon request.
In the coming year, the Company is expected to fully comply with the recommendation, as a new independent
director has been recruited and joined the committee.
Recommendation 7.2: The Board or a committee of the Board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it
continues to be sound; and
(b) disclose, in relation to each reporting period, whether such a review has taken place.
Compliant
Each year, Focus’ full Board, led by the Audit and Risk Committee, reviews the Company’s risk management
framework. Ad hoc reviews may also be conducted when the Board perceives that the risk environment has
shifted significantly. A review was conducted during the year.
Recommendation 7.3: A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs; or
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(b) if it does not have an internal audit function, that fact and the processes it employs for
evaluating and continually improving the effectiveness of its risk management and internal
control processes.
Compliant
The Company does not have an internal audit function as the Board has deemed it is not necessary giving
consideration to the size and nature of the Company. Instead, the full Board through the Audit and Risk
Committee liaises closely with the Company’s external auditor to identify potential improvements to the risk
management and internal control processes.
Recommendation 7.4: A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and, if it does, how it manages or intends to manage
those risks.
Compliant
The Board is keenly aware of the exposure Focus has to economic, environmental and social sustainability
risks, an exposure common to most mining and exploration companies. A brief description of the risk
mitigations put in place by the Company to manage these material risks are:
Economic: In a period with minimal revenue, the Company is working diligently to minimise cash outflow to
ensure its strong cash position is sustained. Future capital investment will be subject to strict financial analysis
to ensure the Company protects its economic sustainability.
Environmental: Focus is investing significantly in reducing the environmental impact of past activities and will
continue to work closely with the relevant government departments and other stakeholders to manage the
Company’s environmental sustainability risks in the long term.
Social: The Company has a strong relationship with local stakeholders including local shires, and Aboriginal
communities. Focus believes the sustainability of the Company and its local stakeholders are intertwined so is
committed to working together with those groups.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1: Remuneration committee
Not Compliant
The Board has expanded the scope of the Nominations Committee to include monitoring the Company’s
Remuneration matters.
The Remuneraton and Nominations Committee steers the Board in its efforts to attract and retain high quality
directors and senior executives. It ensures that the incentives for executive directors and other senior
executives work to align their interests to the success of the entity over the long term while appropriately
managing risks. The Committee further seeks to ensure that the incentives for non-executive directors do not
lessen their independent judgement.
The Company does not fully comply with this recommendation in that the Remuneration and Nominations
Committee comprises only two independent directors during the year ended 31 December 2015 which was
not a strict majority, though the four members were all non-executive. The composition of the Committee and
a record of its meetings is set out in the Directors’ Report. The Remuneration and Nominations Committee
charter is being revised in 2016, the current version is available on the Focus Minerals website and upon
request.
In the coming year, the Company is expected to fully comply with the recommendation, as a new independent
director has been recruited and joined the Committee.
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Recommendation 8.2: A listed entity should separately disclose its policies and practices regarding
the remuneration of non-executive directors and the remuneration of executive directors and other
senior executives.
Compliant
The maximum amount of Directors’ fees is fixed by shareholders at the Annual General Meeting and can only
be varied by shareholders in a similar manner. In determining the allocation of fees, the Board takes into
account the time demands on each Director, together with the responsibilities undertaken by them and market
practices of similar sized businesses in the mining sector.
It is the policy of the Board not to issue Directors incentive shares or options. A Board Retirement Plan is in
place to recognise long term service by retiring Board members and taking into account that the Directors
agreed to less than market stipends during the period that the Company transitioned from explorer to producer
and this practice has continued.
A full discussion of the Company’s remuneration philosophy and framework and the remuneration received by
Directors and executives in the current period is included in the Remuneration Report contained within the
Directors’ Report.
Recommendation 8.3: Equity-based remuneration
As the Company does not have an equity-based remuneration scheme, Recommendation 8.3 is not applicable.
Directors’ Report The Directors present their report on the Group comprising of Focus Minerals Limited – the parent company (referred to
as “the Company”) – and its subsidiaries (together referred to as “the Group” or “Focus”) at the end of, or during the year
ended 31 December 2014.
Directors
The directors of the Company at any time during or since the end of the year are:
Name Designation & Independence Status
Dianfei Pei Chairman - Non-Executive, Non-Independent (appointed on 12 January 2016)
Yuhuan Ge Director - Non-Executive, Non-Independent
Wanghong Yang Director – Executive, Interim CEO
Gerry Fahey Director – Independent
Peter Hepburn-Brown Director – Independent (appointed on 10 April 2015)
Zaiqian Zhang Alternate Director to Dianfei Pei – Executive
Jisheng Lu Chairman - Non-Executive, Non-Independent (resigned on 12 January 2016)
Details of the Directors’ qualifications, experience, special responsibilities and details of directorships of other listed
companies can be found on pages 17 to 19 and in the remuneration report on pages 25 to 30.
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Information on Directors, Officers and Senior Management
Directors
Designation &
Independence
Status
Experience, Expertise & Qualifications
Dianfei Pei
Appointed on
12 January 2016
Chairman
Non-Executive
Non-Independent
Mr Pei is a mining engineer with almost 30 years of relevant
experience. He has been in several senior positions within Shandong
Gold Group, such as Resident Manager of Ling Long Mine and Chief
Health and Safety Inspector of the Group. Currently, he is the
Executive Chairman of Shandong Gold Non-ferrous Mining and the
Executive Chairman of Shandong Gold International Mining.
Mr Pei has a Master’s degree in Mining Engineering at University of
Science and Technology Beijing.
Directorships of other ASX listed companies: Nil
Yuhuan Ge
Appointed on
5 July 2013
Director
Non-Executive
Non-Independent
Mr Ge became Vice Chairman and Deputy General Manager of
Shandong Gold International Mining Corporation Limited in 2010. Mr
Ge has over 30 years’ experiences in mining with a background in
Engineering.
From 1982 to 2002 he worked for the Shandong Gold Group in a
range of management roles. He has considerable international
experience and from 2002 to 2010 he was the Chairman & General
Manager of Jinyan Corporation Limited in Venezuela and Chairman
of Shandong Gold Jinwang Corporation Limited in Suriname.
Directorships of other ASX listed companies: Nil
Wanghong Yang
Appointed on
5 July 2013
Director
Executive
Interim CEO
Mr Yang is the Interim CEO at Focus Minerals Ltd, prior to this role
he worked at Shandong Gold International Mining Corporation
Limited as Financial Controller. He joined Shandong Gold Group in
2008 as the Group’s Senior Manager of Capital Management before
becoming the Deputy General Manager of Shandong Gold
International Mining Corporation Limited.
Mr Yang began his career with the China Machinery Industry Supply
and Sale Corporation, working in a number of management roles
between 1986 and 1999. During this time he also spent three years
based in Nigeria. In 2000, he joined Success Group Co., Ltd, to
coordinate and manage the Group’s investment projects in China
prior to joining China Overseas Holdings Limited in 2002.
Mr Yang has a Bachelor’s degree in Accounting from Renmin
University of China and a Master’s degree in Applied Finance from
Macquarie University.
Directorships of other ASX listed companies: Nil
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Directors
Designation &
Independence
Status
Experience, Expertise & Qualifications
Gerry Fahey
Appointed on
18 April 2011
Director
Independent
Qualifications: F.AusIMM., M.AIG.
Mr Fahey is a geologist with 40 years’ experience. He was Chief
Geologist for Delta Gold between 1992 and 2002 where he gained
extensive resource, mine development and feasibility study
experience on projects including Kanowna Belle and Sunrise Dam in
Australia and Ngezi Platinum in Zimbabwe. Mr Fahey began his
career as a Mine Geologist in the Irish base-metals industry on
projects such as Tynagh, Avoca, and Tara Mines (Navan) owned by
Noranda and later Outokumpu. On migrating to Australia in 1988, he
gained further operational experience in Western Australia and the
Northern Territory (Whim Creek and Dominion Mining), prior to joining
Delta Gold. He formed FinOre Mining Consultants in 2005, which
merged with CSA Global Pty Ltd in 2006.
Mr Fahey served on the Joint Ore Reserve Committee (JORC) from
2000 to 2014 and is a former Board Member (Federal Councillor) for
the Australian Institute of Geoscientists (AIG). He is a Fellow of the
AusIMM and Member of the AIG.
Directorships of other ASX listed companies:
Prospect Resources Limited (Non-Executive Director:
appointed July 2013, ongoing)
Modun Resources Limited (Non-Executive Director:
resigned January 2014)
Peter Hepburn-Brown
Appointed on
10 April 2015
Director
Independent
Mr Hepburn-Brown has over 35 years mining experience including
senior management and Board positions. He served as the Chairman
of MRL Corporation Limited and in the last five years has also been
an Executive Director of Medusa Mining Limited. He graduated from
the Western Australian School of Mines with Bachelor of Applied
Science and also holds a Graduate Diploma of Human Resources
from Monash University.
Directorships of other ASX listed companies:
MRL Corporation Limited (Non-Executive Chairman,
resigned November 2015)
Medusa Mining Ltd (Executive Director, resigned August
2014)
Zaiqian Zhang
Appointed on
5 July 2013
Alternate Director
Executive
Qualifications: BSc (Hons), MSc
Mr Zhang joined Focus Minerals Ltd in September 2013 as a Senior
Accountant. Prior to this Mr Zhang served as the Deputy Manager,
Department of Investment and Development for Shandong Gold
International Mining Corporation Limited. Mr Zhang has a BSc (Hons)
Accounting for Management and an MSc Accounting and Finance
from Aston University, Birmingham, United Kingdom.
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Directors
Designation &
Independence
Status
Experience, Expertise & Qualifications
Jisheng Lu
Appointed as Director
on 5 July 2013
Elected as Chairman
on 29 November 2013
Resigned on
12 January 2016
Chairman
Non-Executive
Non-Independent
Mr Lu has over 30 years’ experience in mining industry with a geology
background. He worked at the Yinan Gold Mine from 1985 to 2001
where he became the Division Director and Assistant General
Manager. Between 2001 and 2009 he was Deputy General Manager
of Qingdao Co., Ltd and Changyi Mining Co., Ltd, both are Shandong
Gold Group’s subsidiaries. Until December 2012 he was the Deputy
General Manager of Shandong Gold Nonferrous Metal Mining Co.,
Ltd and General Manager of Jinhongling Mining Limited of Inner
Mongolia. He then became the Vice Chairman and General Manager
of Shandong Gold Non-ferrous Metals Mining Group.
Directorships of other ASX listed companies: Nil
Note: For director’s special responsibilities during the year ended 31 December 2014, please refer to the Remuneration
Report
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Senior Management
Wanghong Yang – Interim Chief Executive Officer
Mr. Yang joined Focus Minerals Limited on 2 September 2013 as the General Manager – Finance. Following the former
Chairman and Acting CEO’s resignation on 29 November 2013, Mr Yang was appointed as the Interim CEO by the Board
of Directors.
Please refer to the directors’ section for more information about Mr Yang.
Dane Etheridge – Company Secretary and General Manager of Business Development
Qualifications: BCom (Hons), MAppFin, PhD, CFA, AGIA, F Fin
Appointed: 25 March 2014
Dr Etheridge has more than ten years’ experience in corporate governance and corporate finance gained through a diverse
professional background including management consulting, finance academia, corporate advisor and senior management
of ASX listed and not for profit organisations.
In his most recent position prior to Focus Minerals, Dr Etheridge played a key role in advising Boards and senior
management of large ASX listed and government enterprises with the strategy consulting firm Chauvel Group. He is a
Chartered Secretary, a Chartered Financial Analyst charterholder, and a Fellow of the Financial Services Institute of
Australasia.
Interests in the Shares and Options of the Company and Related Bodies Corporate
At the date of this report, the direct and indirect interests of directors in the shares and options of the Company were:
Ordinary Shares Options (Unlisted)
Gerry Fahey 12,820 -
Dianfei Pei* 90,039,954 -
Yuhuan Ge* 90,039,954 -
Wanghong Yang* 90,039,954 -
Zaiqian Zhang - -
*Messieurs Pei, Ge and Yang hold indirect interest of the Company through Shandong Gold International Mining
Corporation Limited, for whom they are executives.
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Directors’ Meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the number
of meetings attended by each director was as follows:
Board
Audit and
Business Risk
Committee
Remuneration
and Nominations
Committee
Technical
Committee
A B A B A B A B
Directors
Jisheng Lu 5 5 1 1 - - 1 1
Yuhuan Ge 4 5 1 1 - - 1 1
Wanghong Yang 5 5 - - - - 1 1
Gerry Fahey 5 5 1 1 - - 1 1
Peter Hepburn-Brown 2 2 - - - - 1 1
A – Number of meetings attended.
B – Number of meetings held during the time the director held office or was a member of the relevant committee during the year.
Capital Structure
Ordinary shares
As at the date of this report, the Company had on issue 182,748,565 fully paid ordinary shares.
On 22 May 2015, the Company completed a share consolidation through the conversion of 50 fully paid ordinary shares
into 1 fully paid ordinary share. The comparison figures, such as earnings per share and number of options, have been
restated on the post share consolidation basis.
Share Options
Options Issued
There were no options issued during the year ended 31 December 2015.
Options Exercised
There were no options exercised during the year ended 31 December 2015.
Options Lapsed
There were no options lapsed during the year ended 31 December 2015.
On 28 February 2016, a total of 300,000 options to acquire shares at an exercise price of $2.50 lapsed.
As at the date of this report, there are no unissued ordinary shares under options.
Principal Activities
The principal activity of the Group during the year was gold exploration in Western Australia.
.
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Review of Operations
Overview
In 2015, Focus Minerals continued to support its exploration strategy by investing over $8 million in its drilling campaigns
with over 57,000m drilled on the Laverton and Coolgardie tenements. Moreover, the Company was delighted to announce
the maiden high-grade resource at Bonnie Vale (117,000oz @ 16.9g/t).
Focus had adopted a simplified and disciplined approach to all of its business activities, achieving cost saving through
increasing productivity. The Company conducted internal reviews and obtained a cash refund of $1.742 million from the
ATO for unclaimed taxes dating back to 2007. The full-year loss for 2015 was $2.830 million, which was 88% lower than
2014.
Exploration
Focus’ exploration strategy aims to extend and improve the Company’s current known resources and discover new ore
bodies. In 2015, the company drilled a total of 776 exploration holes for a total of 57,398.6m across its Laverton and
Coolgardie projects.
At Laverton a total of 320 holes for 21,150.5m of drilling was completed. The main focus was the drilling in Karridale area.
The best results from the Laverton drilling included:
8.0m @ 27.46 g/t Au from 425m in KARC154
1.0m @ 60.50 g/t Au from 51m, 3.0m @ 17.33 g/t Au from 69m and [email protected] g/t Au from 114m in KARC156
2.0m @ 8.78 g/t Au from 145m and 8.1m @ 10.05 g/t Au from183.4m in KARC158
3.0m @ 25.13 g/t Au from 274m in KARC163
3.1m @ 11.43 g/t Au from 146.9m in KARC165
In addition to the drilling conducted at Laverton during the year, a 603 line kilometre airborne geophysical survey was flown
over 9 tenements in the Burtville area. Multiple structural targets in areas of transported regolith cover have been identified
from this work.
A separate, two square km, Sub-Audio Magnetic (SAM) ground survey covered the Karridale Project and its extensions.
Lines were at 100m spacing in two orthogonal directions (east–west and north–south), with additional 50m infill line spacing
collected over KARD154 and its arsenopyrite intersection. The SAM survey highlighted the thrust fault surfaces that
delineate the Karridale and Boomerang historic mines, allowing improved drill targeting.
At Coolgardie a total of 304 holes were drilled for 26,683m, this included the exploration work conducted at Bonnie Vale,
Brilliant, New Australia, Bayleys extension as well as a regional Slimline RC program.
The Company’s 2015 drilling at Bonnie Vale continued to intercept the high grade gold mineralisation which included:
2.0m @ 12.84 g/t Au from 229m in BONC064
1.0m @ 10.41 g/t Au from 334m in BONCD065
5.5m @ 11.81 g/t Au from 223m in BONCD066
1.0m @ 10.43 g/t Au from 111m and 3.7m @ 10.48 g/t Au from 151.3m and 2.5m @ 13.88 g/t Au from 181m in
BONDD068
2.0m @ 14.18 g/t Au from 118m in BONC070
2m @ 17.52g/t Au from 134m in BONC090
4m @ 14.31g/t Au from 117m in BONC114
In November 2015, a maiden high grade mineral resource at Bonnie Vale was released. The JORC 2012 Bonnie Vale
Mineral Resource tabulation for Indicated and Inferred material above 3.0g/t gold cut-off is shown in Table 1 below for the
Main Quarry Reef:
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Classification Tonnes Grade (g/t Au) Resource (Oz)
Indicated 113,000 16.8 61,000
Inferred 102,000 17.0 56,000
Total 215,000 16.9 117,000
Table 1: Bonnie Vale Mineral Resources by Resources Category at 3.0g/t Au cut-off
In addition, a regional slimline RC programme was completed with prospects drilled in the vicinity of the Tindals, Forrest,
Norris and Malaga prospects, some new gold mineralisation zones have been identified, in particular the results from
Possum south which included 1m @ 25.0 g/t Au from 7m and 1m @ 3.77 g/t Au from 11m in FCSL129.
Operating Result
On 22 May 2015, the Company completed a share consolidation through the conversion of 50 fully paid ordinary shares
into 1 fully paid ordinary share.
The Company incurred a loss of $2.830 million for the year ended 31 December 2015 (12 months to 31 December 2014
loss: $23.370 million).
At 31 December 2015, the Company has cash, cash equivalents and short-term deposit (excluding environmental
performance bonds) of $57.610 million (31 December 2014: $65.782 million).
Net cash inflow from operations for the year ended 31 December 2015 totalled $0.002 million (12 months to 31 December
2014: $ 8.808 million outflow).
There were no issues of capital during the year ended 31 December 2015. On 28 February 2016, a total of 300,000 options
to acquire shares at an exercise price of $2.50 lapsed.
Dividends
No dividends have been paid or provided in the year (2014r: nil).
Earnings per Share 31 December
2015
31 December
2014
Basic loss per share (cents per share) (1.55) (12.79)
Diluted loss per share (cents per share) (1.55) (12.79)
Significant Changes in the State of Affairs
Other than explained in the Review of Operations section above, there have been no significant changes in the state of
affairs of the consolidated group to balance date.
Significant Events after Balance Date
Except as otherwise disclosed in this report, there has not been any matter or circumstance that has arisen after the
balance date that has significantly affected, or may significantly effect, the operations of the consolidated group, the results
of those operations, or the state of affairs of the consolidated group in future financial periods.
Likely Developments and Expected Results
The Company has now entered an exploration only phase and it is not possible to predict likely developments and expected
results as these will be dependent upon exploration success and conversion of existing resources
Environmental Regulations
The Company’s operations hold licences issued by the relevant regulatory authorities. These licences specify the limits
and regulate the management associated with the operations of the Group. At the date of this report the Group is not aware
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of any breach of those environmental regulations which apply to the Company’s operations. The Group continues to comply
with its specified regulations.
Indemnification and Insurance of Directors and Officers
The Company has paid premiums of $20,000 (December 2014: $20,000) to insure the directors and officers of the
Company against liabilities for costs and expenses incurred by them in defending legal proceedings arising out of their
conduct while acting in the capacity of director or officer of the Company, other than conduct involving a wilful breach of
duty in relation to the Company.
Remuneration Report
This report, prepared in accordance with the Corporations Act 2001, contains detailed information regarding the
remuneration arrangements for the Directors and Senior Executives who are the ‘key management personnel’ (KMP) of
the Company and the consolidated group. The Board formed the view that the two most senior people in the organisation,
being the Interim Chief Executive Officer (Interim CEO) and the General Manager – Business Development and
Improvement/Company Secretary are, in addition to the directors, the only executives who satisfy the “key management
personnel” criteria during the period. The tables disclosing remuneration for this period and comparatives only include
these KMP.
The KMP for the year ended 31 December 2015 are listed in the table below:
Directors Capacity Change during the Year
Jisheng Lu Non-Executive, Non-Independent None1
Yuhuan Ge Non-Executive, Non-Independent None
Gerry Fahey Independent None
Peter Hepburn-Brown Independent Appointed on 10 April 2015
Wanghong Yang Executive, Interim CEO None
Zaiqian Zhang Alternate Director, Executive None
Current Executives Capacity Change during the Year
Dane Etheridge
General Manager – Business
Development and Improvement and
Company Secretary
None
Remuneration Objectives
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board and
executive team by remunerating directors and key executives fairly and appropriately with reference to relevant
employment market conditions.
The expected outcomes of the remuneration structure are:
Retaining and motivating key executives; and
Attracting high quality management to the Company.
Remuneration Committee Established
The Board is responsible for determining and reviewing compensation arrangements for the directors themselves and the
Chief Executive Officer and executive team. The Board has established a Remuneration and Nominations Committee,
comprising of all the non-executive directors.
Members of the Remuneration and Nominations Committee during the year were:
Gerry Fahey - Committee Chairman
Jisheng Lu2
Yuhuan Ge
Peter Hepburn-Brown
The Remuneration and Nominations Committee did not meet during the year.
1 Mr Jisheng Lu resigned on 12 January 2016 and his position was succeeded by Mr Dianfei Pei on the same day.
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Compensation of Key Management Personnel
Remuneration Structure
In accordance with best practice of the Corporate Governance Principles and Recommendations 3rd Edition, the
remuneration structures for non-executive directors and executive directors are separate and distinct.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee of the Board of Directors of the Company is responsible for determining
and reviewing compensation arrangements for the directors, the CEO and the senior executive team.
The Remuneration and Nominations Committee assesses the appropriateness of the nature and amount of remuneration
of directors and senior executives on a periodic basis by reference to relevant employment market conditions with an
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team,
subject to the following section relating to non-executive directors. The committee did not meet this year.
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid
to non-executive directors of comparable companies when undertaking the annual review process.
Each non-executive director receives a fee for being a director of the Company.
The Company introduced a Retirement Allowance in 2011 for the long term service of Directors, tied solely to their current
Directors Fee at the time of retirement (Fixed Component). The application of the allowance was back dated to the time
the directors commenced in their role.
The allowance is as follows:
3 - 5 Years’ Service – 25% of annual fees on retirement
5 - 8 Years’ Service – 50% of annual fees on retirement
8+ Years’ Service – 100% of annual fees on retirement
During the year, no Directors were paid under this benefit.
The committees of the Board, as of the date of this report their Chair and members are presently as follows:
Board Member Position Audit & Business
Risk Technical
Remuneration and
Nominations
Jisheng Lu2
Director
Non-Executive
Non-Independent
M M M
Yuhuan Ge
Director
Non-Executive
Non-Independent
M M M
Gerry Fahey Director
Independent C C C
Peter Hepburn-Brown Director
Independent M M M
2 Mr Jisheng Lu resigned on 12 January 2016 and his position was succeeded by Mr Dianfei Pei on the same day.
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Wanghong Yang Director
Executive - M -
Zaiqian Zhang3 Alternate Director
Executive - - -
C=Chairman, M=Member
The following fees have applied:
Chairman of the Board $80,000 per annum
Other directors $50,000 per annum
The compensation provided to the Directors in these circumstances is fixed, which reflects the time commitment and
responsibilities of their roles.
At present, the maximum aggregate remuneration of directors’ fees is $700,000 per annum of which $213,333 has been
paid to the directors as fees during the year.
The remuneration of directors for the year ended 31 December 2015 is detailed in the remuneration table below.
Senior Executive and Executive Director Remuneration
Remuneration primarily consists of fixed and performance based remuneration where determined by the Remuneration
and Nominations Committee. The Company had established an equity based scheme that will allow the executive team to
share in the success of Focus Minerals Ltd. Any Issue of an equity component to executive directors is subject to the
approval of shareholders in general meeting and it is a policy of the current Board that Directors do not participate in equity
based proposals.
Fixed Remuneration
Fixed remuneration is reviewed by the Remuneration and Nominations Committee. The process consists of a review of
relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and
practices. The Committee has access to external, independent advice where necessary.
Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash
and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen
will be optimal for the recipient without creating additional cost for the Group.
Performance Based Remuneration
The key performance indicators (KPIs) are set annually, with a certain level of consultation with key management personnel
to ensure a common understanding. The KPI’s are specifically tailored to the areas each individual is involved in and has
a level of control over. The KPIs target areas the Board believes hold greater potential for group expansion and profit,
covering financial and non-financial as well as short and long-term goals or achievement of specific projects or tasks. The
level set for each KPI is based on budgeted figures for the Group and completion of defined projects or tasks within defined
timeframes. The bonuses applicable to key management personnel are a maximum of 25-50% of the base salary
applicable to each executive and the final amount payable as disclosed in the remuneration table is subject to KPI
achievement and Company financial performance. Maximum amount, actual amount agreed and communicated by the
Remuneration and Nominations Committee annually. The decision to agree and award a bonus is at the discretion of the
recommendation of the CEO and approval of the Remuneration and Nominations Committee. The decision to agree and
award a bonus to the CEO is separately considered by the Remuneration and Nominations Committee.
3 Base salary of $133,250 plus superannuation guarantee. 4-year fixed term contract, starting from 2 September 2013. Termination: 4
weeks’ notice plus entitlements according to Fair Work Act 2009.
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In determining whether or not a KPI has been achieved, the Remuneration and Nominations Committee bases the
assessment on audited figures or on verifiable achievement of the relevant KPI. During the year, it was decided not to
award bonuses.
For the year ended 31 December 2015, the Company did not set any KPIs.
The Company has issued share options in previous years to certain key employees. The options are subject to vesting
criteria related to the company’s performance as follows:
Vesting of the options is subject to the Company achieving a Total Shareholder Return for the 12 month period prior to the
applicable Vesting Date of at least within the 2nd quartile of Total Shareholder Returns for the Comparable Entities.
Comparable Entities have been determined to be 12 gold producing companies listed on established stock exchanges and
with operations predominately located within the Western Australian Eastern Goldfields region.
Total Shareholder Return is defined as the change in capital value per share of an entity over a 12-month period, plus
dividends per share, expressed as a plus or minus percentage of their opening value.
No options were issued during the year. At this stage, no LTI programmes are in place. It is intended to implement an
appropriate LTI at a future date.
Key Management Personnel Contracts
The key terms of the employment contracts for the key management personnel are summarised as follows:
Wanghong Yang – Interim Chief Executive Officer
Base Salary: $280,000 per annum plus superannuation guarantee
Term: Four years starting from 2 September 2013
Termination: Four weeks’ notice plus three months of salary
Dane Etheridge – Company Secretary and GM Business Development and Improvement
Base Salary: $245,000 per annum plus superannuation guarantee
Term: Permanent starting from 24 June 2013
Termination: Four weeks’ notice plus three months of salary
Remuneration Tables
Directors’ remuneration for the year ended 31 December 2015
Short-Term
Benefits
Post-Employment
Benefits %
Salary
$
Fees
$
Other
$
Super-
annuation
$
Bonus
$
Total
$
Performance
Related
$
Directors
Dianfei Pei - - - - - - -
Yuhuan Ge - 50,000 - - - 50,000 -
Wanghong Yang 280,000 - - 26,600 - 306,600 -
Gerry Fahey - 50,000 - 4,750 - 54,750 -
Peter Hepburn-Brown - 33,333 - 3,167 - 36,500 -
Zaiqian Zhang 126,395 - - 12,008 - 138,403 -
Former Directors
Jisheng Lu - 80,000 - - - 80,000 -
Total 406,395 213,333 - 46,525 - 666,253 -
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Directors’ remuneration for the year ended 31 December 2014.
Short-Term
Benefits
Post-Employment
Benefits %
Salary
$
Fees
$
Other
$
Super-
annuation
$
Bonus
$
Total
$
Performance
Related
$
Directors
Jisheng Lu - 80,000 - - - 80,000 -
Yuhuan Ge - 50,000 - - - 50,000 -
Wanghong Yang 265,413 25,000 - 27,589 - 318,002 -
Gerry Fahey - 50,000 - 4,750 - 54,750 -
Zaiqian Zhang 129,150 - - 12,269 - 141,419 -
Former Director
Bruce McComish4 - 35,000 12,500 3,325 - 50,825 -
Total 394,563 240,000 12,500 47,933 - 694,996 -
Messiers Pei, Ge, Yang and Lu are Shandong Gold Representatives, according to their employment contracts, the directors’
fees belong to Shandong Gold.
Remuneration of the key management personnel for the year ended 31 December 2015
Short-Term
Benefits
Post-Employment
Benefits %
Salary
$
Fees
$
Other
$
Super-
annuation
$
Bonus
$
Total
$
Performance
Related
$
Current Executive
Dane Etheridge 245,000 - - 23,275 - 268,275 -
4 Pursuant to his contract and Focus’ policy, Mr McComish was paid $12,500 on his retirement, representing 25 percent of his annual
director fees. As a Shandong Gold representative on the Board, Mr McComish received $15,000 plus superannuation from Shandong
Gold during the year.
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Remuneration of the key management personnel for the year ended 31 December 2014
Short-Term
Benefits
Post-Employment
Benefits %
Salary
$
Fees
$
Other
$
Super-
annuation
$
Bonus
$
Total
$
Performance
Related
$
Executive
Dane Etheridge 229,060 - - 21,761 - 250,821 -
Former Executive
Paul Fromson5 - - 60,150 - - 60,150 -
Relationship between Remuneration and Focus Minerals’ Performance
The majority of salary is fixed while small portions of remuneration, such as bonus and share option, are linked to the
Company’s performance. Although there is some linkage to the Company’s performance, it is not closely aligned.
The following table shows key performance indicators for the Company over the last five reporting periods, which have
been restated to reflect the 50-to-1 share consolidation:
This is the end of remuneration report.
5 Mr Fromson was hired as a consultant after his redundancy, the fee is the remuneration for his service.
12 months to
31 December
12 months to
31 December
6 months to
31 December
12 months to
30 June
2015 2014 2013 2013 2012
(Loss) / profit
attributable to the
owners of Focus
Minerals Ltd
(‘$000’s)
(2,830) (23,370) (132,872) (171,523) 6,844
Basic earnings
per share (CPS) (1.55) (12.79) (72.71) (93.86) 3.75
Dividend
payments $ n/a n/a n/a n/a n/a
Dividend payout
ratio n/a n/a n/a n/a n/a
Share Price as at
the end of the
year/period
$ 0.31 0.35 0.60 0.70 1.85
Decrease in share
price (11%) (41%) (14%) (62%) (47%)
Total KMP
incentive as
percentage of
profit/loss for the
year/period
% - - - 0.70% 1.56%
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Proceedings on Behalf of the Company
Other than as disclosed in this report no person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237
of the Corporations Act 2001.
Non-Audit Services
During the year ended 31 December 2015, there are no non-audit services provided by the Company’s auditor.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2015 has been received and can be found on
page 22 of the Annual Report.
Rounding of Amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This Report of the Directors is signed in accordance with a resolution of the Board of Directors.
Dianfei Pei
Chairman of the Board
31 March 2016
Jinan, China
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Auditor’s Independence Declaration
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Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
Consolidated
Notes 2015
$’000
2014
$’000
Revenue from continuing operations 2(a) 2,502 3,372
Other Income 2(b) 2,062 1,889
Employee expenses (1,283) (2,423)
Depreciation Expenses 2(c) (1,288) (2,300)
Finance Costs (1,016) (1,344)
Impairment expense 2(c) - (13,785)
Loss on disposal of tenements and plant and equipment 2(c) (395) (3,484)
Care and Maintenance Costs (1,534) (3,091)
Corporate and Other Expenses 2(c) (1,878) (2,204)
Loss Before Income Tax (2,830) (23,370)
Income Tax Expense 4 - -
Loss After Income Tax (2,830) (23,370)
Other Comprehensive Income for the year, Net of Tax - -
Total Comprehensive Loss (2,830) (23,370)
Total Comprehensive Loss Attributable to:
Owners of the Parent (2,830) (23,370)
Total Comprehensive Loss (2,830) (23,370)
Earnings per Share (Restated)
Basic Loss per Share (Cents Per Share) 5 (1.55) (12.79)
Diluted Loss per Share (Cents Per Share) 5 (1.55) (12.79)
The accompanying notes form part of these financial statements. F
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Consolidated
31 December 31 December
Notes 2015
$’000
2014
$’000
Assets
Current Assets
Cash and Cash Equivalents 6 1,995 9,210
Short-term deposits 6 55,615 56,572
Restricted Cash 6 - 132
Trade and Other Receivables 7 1,148 2,027
Financial Assets 150 247
Total Current Assets 58,908 68,188
Non-Current Assets
Restricted Cash 6 16,331 18,991
Inventories 8 1,293 1,293
Plant and Equipment 9 3,480 4,719
Exploration and Evaluation Assets 10 50,613 43,261
Total Non-Current Assets 71,717 68,264
Total Assets 130,625 136,452
Liabilities
Current Liabilities
Trade and Other Payables 260 1,599
Interest Bearing Liabilities - 160
Provisions 11 351 2,492
Total Current Liabilities 611 4,251
Non-Current Liabilities
Other Payable 81 -
Provisions 11 26,116 25,554
Total Non-Current Liabilities 26,197 25,554
Total Liabilities 26,808 29,805
Net Assets 103,817 106,647
Equity
Issued Capital 12 (a) 427,167 427,167
Reserves 12 (c) (6,995) (6,995)
Accumulated Losses (316,355) (313,525)
Total Equity 103,817 106,647
The accompanying notes form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2014
Issued Capital
Accumulated Losses
Reserves Total
$’000 $’000 $’000 $’000
Balance as at 31 December 2013 427,167 (290,155) (6,995) 130,017
Total Comprehensive loss for the year
- (23,370) - (23,370)
Balance as at 31 December 2014 427,167 (313,525) (6,995) 106,647
Total Comprehensive loss for the year
- (2,830) - (2,830)
Balance as at 31 December 2015 427,167 (316,355) (6,995) 103,817
The accompanying notes form part of these financial statements.
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
Consolidated
Notes 2015
’$000
2014
’$000
Cash Flows from Operating Activities
Receipts from Customers - 158
Payments to Suppliers and Employees (Including GST) (7,632) (10,617)
Royalties Paid (11) (620)
Collection / (Payment) of Performance Bonds 2,792 (922)
Other Income 2,234 548
Interest Received 2,865 3,067
Finance Costs (246) (422)
Net Cash Inflow/(Outflow) from Operating Activities 6(ii) 2 (8,808)
Cash Flows from Investing Activities
Proceeds from Sale of Non-Current Assets - 1,393
Acquisition of Plant and Equipment (49) (17)
Proceeds from sale of financial assets - 267
Decrease/(Increase) in short-term deposits 957 (56,572)
Exploration Expenditure (8,125) (8,292)
Net Cash Outflow from Investing Activities (7,217) (63,221)
Net Decrease in Cash and Cash Equivalents (7,215) (72,029)
Cash and Cash Equivalents at the Beginning of the Year 9,210 81,239
Cash and Cash Equivalents at the Ending of the Year 6(i) 1,995 9,210
The accompanying notes form part of these financial statements.
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Note 1: Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements
are for the consolidated entity consisting of Focus Minerals Ltd (‘the parent entity’) and its subsidiaries (the ‘Group’).
(a) Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in the
financial statements and directors’ report have been rounded off to the nearest $1,000, or, in certain cases, to the
nearest dollar.
The consolidated financial statements are presented in Australian dollars (AUD), which is also the functional currency
of the parent company.
The financial report covers the consolidated financial statements of Focus Minerals Ltd and controlled entities.
Focus Minerals Ltd is a for-profit, listed public company, incorporated and domiciled in Australia.
The financial report of Focus Minerals Ltd and controlled entities comply with Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable,
by the measurement at fair value of selected financial assets.
The financial information for the parent entity, Focus Minerals Ltd, disclosed in Note 16 has been prepared on the
same basis as the consolidated financial statements other than investments in subsidiaries, which are held at cost.
(b) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Interim Chief Executive Officer.
(c) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Focus
Minerals Ltd at the end of the reporting period and from time to time during the year. A controlled entity is any entity
over which Focus Minerals Limited has control of the entity, demonstrated by the Group’s exposure to, or rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. In assessing the ability to control, the existence and effect of holdings of actual and
potential voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities
are included only for the period of the year that they were controlled. A list of controlled entities is contained in Note
15 to the financial statements.
The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 1(e)).
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In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the
consolidated group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown
separately within the Equity section of the consolidated Statement of Financial Position and Statement of Profit or
Loss and Other Comprehensive Income. The non-controlling interests in the net assets comprise their interests at the
date of the original business combination and their share of changes in equity since that date.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between
the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a
separate reserve within equity attributable to owners of Focus Minerals Ltd. When the Group ceases to have control,
joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change
in carrying amount recognised in profit of loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition,
any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
Group had directly disposed of the related assets and liabilities. This may mean that amounts previously recognised
in other comprehensive income are reclassified to profit or loss where appropriate. If the ownership interest in a jointly-
controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where
appropriate.
(d) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The
following specific recognition criteria must also be met before revenue is recognised:
Interest Income: Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
Dividends: Revenue is recognised when the Group’s right to receive the payment is established.
Rental Income: Rental income from mining leases is accounted for on a straight-line basis over the lease term.
Contingent rental income is recognised as income in the periods in which it is earned.
(e) Business Combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises
the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration
arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are
expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an
acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value
or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred and the amount of any non-controlling interest in the acquiree over the
fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value
of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.
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Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to
their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being
the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and
conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability
are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
(f) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the minimum
lease payments, each determined at the inception of the lease. The corresponding liability to the lessor is included in
the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income,
unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the
general policy on borrowing costs.
Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed.
(g) Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term,
highly liquid deposits with an original maturity of three months or less. For the purposes of the Statement of Cash
flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
(h) Trade and Other Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for doubtful debts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off. A provision for doubtful receivables is established when there is objective evidence that the Group will not
be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is
the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted
at the effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting
is not material.
The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for
which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off
against the allowance account. Subsequent recoveries of amounts previously written off are credited against other
expenses in profit or loss.
They are presented as current assets unless collection is not expected for more than 12 months after the reporting
date.
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(i) Inventories
Raw materials and stores, ore stockpiles and work in progress and finished gold stocks are physically measured or
estimated and valued at the lower of cost and net realisable value. Net realisable value less costs to sell is assessed
annually based on the amount estimated to be obtained from sale of the item of inventory in the normal course of
business, less any anticipated costs to be incurred prior to its sale.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure and depreciation and amortisation relating to mining activities, the latter being allocated on the basis of
normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make the sale.
Inventories of consumable supplies and spare parts expected to be used in production are valued at the lower of
weighted average cost, which includes the cost of purchase as well as transportation and statutory charges, or net
realisable value. Any provision for obsolescence is determined by reference to specific stock items identified.
During the exploration and development phase, where the cost of extracting the ore exceeds the likely recoverable
amount, work in progress inventory is written down to net realisable value.
(j) Impairment of Financial Assets
The Group assesses at each balance sheet date whether a financial asset or group of financial assets is impaired.
Financial Assets Carried at Amortised Cost
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the
financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The
carrying amount of the asset is reduced either directly or through use of an allowance account.
The amount of the loss is recognised in profit or loss. The Group first assesses whether objective evidence of
impairment exists individually for financial assets that are individually significant, and individually or collectively for
financial assets that are not individually significant.
If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether
significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that
group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is or continues to be recognised are not included in a collective assessment of
impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed.
Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that the carrying value of
the asset does not exceed its amortised cost at the reversal date.
(k) Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
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Deferred income tax liabilities are recognised for all taxable temporary differences except:
When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax assets attributable to income tax losses are reassessed at each balance sheet
date and are recognised to the extent that it has become probable that future taxable profits will be available to allow
the deferred tax asset to be recovered.
Determination of future taxable profits requires estimates and assumptions as to future events and outcomes, in
particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas
of interest will be achieved. This includes estimates and judgements about commodity prices, ore resources, exchange
rates, future capital requirements, future operational performance and the timing of estimated cash flows. Changes in
these estimates and assumptions could impact on the amount and probability of estimated taxable profits and
accordingly the recoverability of deferred tax assets.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
Focus Minerals Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of
these entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(l) Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions
to the instrument. For financial assets, this is the trade-date, the date on which the Company commits itself to either
the purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss
immediately.
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Classification and Subsequent Measurement
Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest
rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled,
between knowledgeable, willing parties.
Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation
techniques are adopted.
Amortised cost is calculated as:
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and
the maturity amount calculated using the Effective Interest Method; and
less any reduction for impairment.
The Effective Interest Method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of income or an expense in profit or loss.
Financial Assets at Fair Value through Profit or Loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as
such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is
managed by key management personnel on a fair value basis in accordance with a documented risk management
or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being
included in profit or loss.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost using the effective interest rate method.
Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost
using the effective interest rate method.
Fair Value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been
impaired. Impairment losses are recognised in the statement of profit or loss.
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De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is
transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and
benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged,
cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed,
is recognised in profit or loss.
(m) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST except:
When the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the statement of financial position.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified
as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(n) Plant and Equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such
cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant
and equipment as a replacement only if it is eligible for capitalisation.
Depreciation
Depreciation on mobile plant is calculated on a straight-line basis over the estimated useful life of the assets being 3
-15 years.
Depreciation of underground assets is calculated on a unit of production basis over the period of the life of mine plan.
Depreciation of the mill treatment assets is calculated on a straight-line basis over the estimated useful life of the
assets, being 10 years.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at the
end of each reporting period.
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Impairment
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may be impaired. Where this is the case then the recoverable amount of this plant and
equipment is estimated.
The recoverable amount of plant and equipment is the higher of fair value less costs of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-
generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair
value.
Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount.
For plant and equipment, impairment losses are recognised in the statement of profit or loss and other comprehensive
income.
De-Recognition and Disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.
(o) Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area
of interest. Such expenditure comprises direct costs and does not include general overheads or administrative
expenditure not having a specific nexus with a particular area of interest.
Exploration expenditure for each area of interest is carried forward as an asset provided the rights to tenure of the
area of interest are current and one of the following conditions is met:
The exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale; or
Exploration and evaluation activities in the area of interest have not, at the reporting date, reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest is continuing.
Exploration expenditure is written off when it fails to meet at least one of the conditions outlined above or an area of
interest is abandoned.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount, or when the cash
generating unit that exploration expenditure assets are a part of are tested for impairment. When facts and
circumstances suggest that the carrying amount exceeds the recoverable amount the impairment loss will be
measured and disclosed in accordance with AASB 136 Impairment of Assets.
When a decision is made to develop an area of interest, all carried forward exploration expenditure in relation to the
area of interest is transferred to Mine Properties and Development.
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(p) Mine Properties and Development
Development expenditure represents the accumulated exploration, evaluation, land and development expenditure
incurred by or on behalf of the Group in relation to areas of interest in which mining of a mineral resource has
commenced.
When further development expenditure is incurred in respect of a mine property after commencement of production,
such expenditure is carried forward as part of the mine property only when substantial future economic benefits are
thereby established, otherwise such expenditure is classified as part of the cost of production.
In some circumstances, where conversion of resources into reserves is expected, some resources may be included.
Development and land expenditure still to be incurred in relation to the current reserves are included in the amortisation
calculation. Where the life of the assets are shorter than the mine life their costs are amortised based on the useful
life of the assets.
The estimated recoverable reserves and life of the mine and the remaining useful life of each class of asset is
reassessed at least annually. Where there is a change in the reserves/resources amortisation rates are
correspondingly adjusted.
(q) Stripping Costs in the Production Phase of a Surface Mine
Production stripping costs (also known as deferred mining costs) are to be capitalised as part of an asset if:
There is a probable future economic benefits will be realised;
The costs can be reliably measured; and
The component of an ore body for which access has been improved can be identified.
The stripping activity asset shall be amortised on a systematic basis, over the expected useful life of the identified
component of the ore body that becomes more accessible as a result of the stripping activity.
(r) Trade and Other Payables
Trade and other payables are recognised originally at fair value and subsequently measured at amortised cost using
the effective interest rate method. Trade and other payables represent liabilities for goods and services provided to
the Group prior to the end of each reporting period that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of goods and services. Trade and other payables are presented as
current liabilities unless payment is not due within 12 months from the reporting date.
(s) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects
the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is
recognised as a borrowing cost.
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(t) Employee Benefits
Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12
months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting
date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience
of employee departures, and period of service.
Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currencies that match, as closely as possible, the estimated future cash outflows.
Termination Benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits
when it is demonstrably committed to either terminating the employment of current employees according to a detailed
formal plan without possibility of withdrawal or to providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than 12 months after the end of the reporting period are
discounted to present value.
(u) Share-Based Payment Transactions
Equity Settled Transactions
The Group provides benefits to certain third parties and employees (including senior executives) in the form of share-
based payments. Third parties and employees render services to the Group in exchange for shares or rights over
shares (“equity-settled transaction”).
The cost of these equity-settled transactions with third parties and employees is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined using a Black
Scholes model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked
to the price of the shares of Focus Minerals Ltd (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period
in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant beneficiary
becomes fully entitled to the award (“vesting date”).
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The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity
instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being
met as the effect of these conditions is included in the determination of fair value at grant date. The statement of profit
or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning
and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional
upon a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense
not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated
as if they were a modification of the original award.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings
per share (see Note 5).
(v) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(w) Restoration and Rehabilitation Costs
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it
is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be
reliably estimated. The mining, extraction and processing activities of the Group give rise to obligations for site
restoration and rehabilitation. Restoration and rehabilitation obligations can include facility decommissioning and
dismantling, removal or treatment of waste materials, land rehabilitation and site restoration. Provisions for the cost of
each rehabilitation program are recognised at the time that environmental disturbance occurs.
Restoration and rehabilitation provisions are initially measured at the expected value of future cash flows required to
rehabilitate the relevant site, discounted to their present value. The judgements and estimates applied for the
estimation of the rehabilitation provisions are discussed in Note 1(aa).
When provisions for restoration and rehabilitation are initially recognised, the corresponding cost is capitalised into
the cost of the related assets and is amortised using the units of production method over the life of the mine. The value
of the provision is progressively increased over time as the effect of discounting unwinds, creating an expense
recognised in finance costs.
At each reporting date the restoration and rehabilitation liability is re-measured to account for any new disturbance,
updated cost estimates, inflation, changes to the estimated reserves and lives of operations, new regulatory
requirements, environmental policies and revised discount rates. Changes to the restoration and rehabilitation liability
are added to or deducted from the related rehabilitation asset and amortised accordingly.
(x) Government Grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate. If the assets related to government grants have been fully impaired, amortised or depreciated,
the grant received is recorded in the statement of profit or loss as other income.
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(y) Earnings per Share
Basic earnings per share is calculated as net result attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share are calculated as net result attributable to members of the parent, adjusted for:
Costs of servicing equity (other than dividends) and preference share dividends;
The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
Other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
(z) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(aa) Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge
and best available current information. Estimates assume a reasonable expectation of future events and are based
on current trends and economic data, obtained both externally and within the Group.
Reserves and Resources
In order to calculate ore reserves and mineral resources, estimates and assumptions are required about a range
of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates,
production costs, transport costs, commodity demand, commodity prices and exchange rates. The consolidated
entity estimates its ore reserves and mineral resources based on information compiled by Competent Persons
(as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves as revised in December 2004 (the JORC code).
As economic assumptions used to estimate reserves change and as additional geological data is generated during
the course of operations, estimates of reserves and mineral resources may vary from period to period. Changes
in reported reserves and mineral resources may affect the Group’s financial results and financial position in a
number of ways, including the following:
Asset carrying values may be affected due to changes in estimated future cash flows;
Depreciation and amortisation charges in profit and loss may change where such charges are determined by the
units of production basis, or where the useful economic lives of assets change; and
Restoration and rehabilitation provision may be affected due to changes in the magnitude of future restoration
and rehabilitation expenditure.
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Exploration and Evaluation Expenditure
The Group’s accounting policy for exploration and evaluation expenditure results in expenditure being capitalised
for an area of interest where it is considered likely to be recoverable by future exploitation or sale or where the
activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This
policy requires management to make certain estimates as to future events and circumstances, in particular
whether an economically viable extraction operation can be established. Any such estimates and assumptions
may change as new information becomes available. If, after having capitalised the expenditure under the policy,
a judgement is made that recovery of the expenditure is unlikely, the relevant capitalised amount will be written
off to profit and loss.
Restoration and Rehabilitation Provision
The Group’s accounting policy for the recognition of restoration and rehabilitation provisions requires significant
estimates including the magnitude of possible works required for the removal of infrastructure and of rehabilitation
works, future cost of performing the work, the inflation and discount rates and the timing of cash flows. These
uncertainties may result in future actual expenditure differing from the amounts currently provided. When these
factors change or become known in the future, such differences will impact the mine rehabilitation provision in the
period in which they change or become known.
Impairment of Assets
The Group assesses each Cash-Generating Unit (CGU), to determine whether there is any indication of
impairment or reversal. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable
amount is made, which is deemed as being the higher of the fair value less costs of disposal and value in use
calculated in accordance with accounting policy Note 1(n). These assessments require the use of estimates and
assumptions such as discount rates, exchange rate, commodity prices, gold multiple values, future operating
development and sustaining capital requirements and operating performance (including the magnitude and timing
of related cash flow).
Income Taxes
Judgement is required in assessing whether deferred tax assets and liabilities are recognised on the statement
of financial position. Deferred tax assets, including those arising from temporary differences, are recognised
only when it is considered more likely than not that they will be recovered, which is dependent on the generation
of future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised. Refer
to Note 4 for details of the judgement applied in the current period in relation to income taxes.
(ab) New Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December
2015 reporting period. The Group’s assessment of the impact of these new standards and interpretations is set out
below.
(i) AASB 9 Financial Instruments (Must be applied for financial years commencing on or after 1 January 2018).
AASB 9 Financial Instruments addresses the classification, measurement and de-recognition of financial assets and
financial liabilities. The standard is not applicable until 1 January 2018 but is available for early adoption. The de-
recognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and
have not been changed. The Group has not yet decided when to adopt AASB 9.
The new hedging rules align hedge accounting more closely with the entity's risk management. As a general rule, it
will be easier to apply hedge accounting going forward. The new standard also introduces expanded disclosure
requirements and changes in presentation. Management is currently in the process of assessing the impact of the
new rules and at this stage.
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(ii) AASB 15 Revenue from contracts with customers (Mandatory for financial years commencing on or after 1 January 2018)
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers
contracts for goods and services and AASB 111 which covers construction contracts. The new standard is based on
the principle that revenue is recognised when control of a good or service transfers to a customer – so the notion of
control replaces the existing notion of risks and rewards. Management is currently in the process of assessing the
impact of the new rules and at this stage.
There are no other standards that are not yet effective and that are expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions.
Note 2: Revenues and Expenses
Consolidated
2015
$’000
2014
$’000
(a) Revenue from continuing operations
Gold sales - 158
Interest income 2,502 3,214
Total revenue from continuing operations 2,502 3,372
(b) Other income
Sundry income 2,062 1,868
Finance income - 21
Total Other income 2,062 1,889
(c) Expenses
Depreciation Expenses
Depreciation 1,288 2,300
Total depreciation expenses 1,288 2,300
Corporate and other expenses
Professional services and consulting fees 750 432
Corporate expense 728 1,378
Office lease costs 400 394
Total corporate and other expenses 1,878 2,204
Loss on disposal of tenements and plant and equipment
Exploration assets 395 2,090
Plant & Equipment - 1,394
Total loss on disposal of tenements and plant and equipment 395 3,484
Impairment expense
Impairment – Non-current assets - 13,785
Total impairment expense - 13,785
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Note 3: Segment Reporting
All Focus Minerals Limited’s subsidiaries are wholly owned. The Group has three reportable segments, as described below,
which are the Group’s strategic business units. The business units are managed separately as they require differing
processes and skills. The Chief Executive Officer reviews internal management reports on each of these business units a
monthly basis. Segment Financial Information for the year ended 31 December 2015 is presented below:
2015 2015 2015 2015
Coolgardie Laverton Corporate Consolidated
$’000 $’000 $’000 $’000
Revenue from continuing operations 14 177 2,311 2,502
Other income 710 427 925 2,530
Depreciation (1,167) - (121) (1,288)
Employee expenses (90) (18) (1,175) (1,283)
Finance cost - - (1,016) (1,016)
Care and Maintenance Costs (607) (927) - (1,534)
Loss on disposal of tenements and
plant and equipment (195) (200) - (395)
Corporate and Other expenses - - (1,878) (1,878)
SEGMENTED LOSS BEFORE TAX (1,335) (541) (954) (2,830)
Income taxes - - - -
SEGMENTED LOSS (1,335) (541) (954) (2,830)
Current Assets 978 586 57,345 58,909
Non-Current Assets
- Restricted Cash 96 15 16,220 16,331
- Inventories 1,293 - - 1,293
- Property, Plant & Equipment 3,410 - 69 3,479
- Exploration and Evaluation 32,289 18,323 - 50,612
TOTAL ASSETS 38,066 18,924 73,634 130,624
Current Liabilities 119 65 428 612
Other Non-Current Liabilities 11,780 14,410 6 26,196
TOTAL LIABILITIES 11,899 4,475 434 26,808
NET ASSETS 26,167 4,449 73,200 103,816
Capital Expenditures 4,522 3,267 7 7,796
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Segment Financial Information for the year ended 31 December 2014 is presented below:
2014 2014 2014 2014
Coolgardie Laverton Corporate Consolidated
$’000 $’000 $’000 $’000
Revenue from continuing operations 168 293 2,911 3,372
Other income 859 964 66 1,889
Depreciation (2,148) - (152) (2,300)
Employee expenses (296) (13) (2,114) (2,423)
Finance cost - (1) (1,343) (1,344)
Care and Maintenance Costs (1,452) (1,639) - (3,091)
Impairment (11,922) (1,863) - (13,785)
Loss on disposal of tenements and plant and
equipment (2,602) (437) (445) (3,484)
Corporate and Other expenses (75) (118) (2,011) (2,204)
SEGMENTED LOSS BEFORE TAX (17,468) (2,814) (3,088) (23,370)
Income taxes - - - -
SEGMENTED LOSS (17,468) (2,814) (3,088) (23,370)
Current Assets 523 949 66,716 68,188
Non-Current Assets
- Restricted Cash 706 7,458 10,827 18,991
- Inventories 1,293 - - 1,293
- Property, Plant & Equipment 4,536 - 183 4,719
- Exploration and Evaluation 28,004 15,257 - 43,261
TOTAL ASSETS 35,062 23,664 77,726 136,452
Current Liabilities 3,301 360 590 4,251
Other Non-Current Liabilities 11,355 14,131 68 25,554
TOTAL LIABILITIES 14,656 14,491 658 29,805
NET ASSETS 20,407 9,173 77,067 106,647
Capital Expenditures 4,024 4,188 80 8,292
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Note 4: Income Tax
Consolidated
2015 2014
$’000 $’000
Major components of income tax expense for the years ended 31 December
2015 and 31 December 2014 are:
Income Statement
Current income tax
Current income tax charge - -
Deferred tax assets relating to tax losses - -
Deferred income tax
Relating to origination and reversal of temporary differences - -
Temporary differences recognised in equity - -
Current year tax loss not recognised in current year - -
Income tax expense (benefit) reported in income statement - -
Statement of changes in equity
Deferred income tax
Capital raising costs - -
Income tax expenses reported in equity - -
A reconciliation of income tax expense applicable to accounting loss before income tax at the statutory income tax rate to
income tax expense at the Company’s effective income tax rate for the years ended 31 December 2015 and 31 December
2014 is as follows:
2015 2014
$’000 $’000
Accounting loss before tax (2,830) (23,369)
Tax at the statutory income tax rate of 30% (2014: 30%) (849) (7,011)
Effect of expenses that are not deductible in determining taxable profit 2 11
Non-taxable income (91) (228)
Effect of unused tax losses and tax offsets not recognised as deferred tax assets 4,228 11,728
Previously unrecognised deferred tax assets used to reduce deferred tax
liabilities (3,290) (4,500)
Income tax expense recognised in profit or loss - -
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Tax Consolidation
The Company and its 100% owned controlled entities have formed a tax consolidated group. Members of the tax
consolidated group have entered into a tax sharing arrangement with effect from 30 June 2013 in order to allocate income
tax expense to the wholly owned controlled entities on pro-rata basis. The agreement provides for the allocation of income
tax liabilities between the entities should the head entity default on its tax payment obligations. At balance date, the
possibility of default is remote. The head entity of the tax consolidated group is Focus Minerals Limited.
Tax Effect Accounting by Members of the Tax Consolidated Group
Members of the tax consolidated group have entered into a tax funding agreement with effect from 30 June 2013. The tax
funding agreement provides for the allocation of current taxes to members of the tax consolidated group. Deferred taxes
are allocated to members of the tax consolidated group in accordance with a group allocation approach which is consistent
with the principles of AASB 112 Income Taxes. The allocation of taxes under the tax funding agreement is recognised as
an increase/decrease in the controlled entities intercompany accounts with the tax consolidated group head company,
Focus Minerals Ltd.
Unrecognised deferred tax balances Consolidated
31 December
2015
$’000
31 December
2014
$’000
Deferred tax assets unrecognised:
Tax losses (revenue in nature) 125,160 120,447
Deferred tax assets – other 4,643 7,933
Capital losses 4,310 4,310
Total 134,113 132,690
Net deferred tax assets have not been brought to account as it is not probable that immediate future profits will be available against which deductible temporary differences and tax losses can be utilised.
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Note 5: Earnings per Share
Consolidated
2015
Cents per Share
2014
Cents per Share
(Restated)
Basic earnings per share:
Total Basic EPS (1.55) (12.79)
Diluted earnings per share
Total Diluted EPS (1.55) (12.79)
Basic Earnings per share $000 $000
The earnings used in the calculation of basic earnings per share (2,830) (23,370)
Weighted average number of ordinary shares for the purposes of basic
earnings per share 182,748,565 182,748,565
Diluted Earnings per share ‘$000 ‘$000
The earnings used in the calculation of diluted earnings per share (2,830) (23,370)
Weighted average number of ordinary shares for the purposes of diluted
earnings per share 182,748,565 182,748,565
In May 2015, Focus Minerals Ltd consolidated 9,137,375,877 fully paid ordinary shares into 182,748,565 on a 1 for 50 basis (refer Note 12). The calculation of basic and diluted earnings per share for the year ended 31 December 2014 is adjusted retrospectively after the share consolidation.
Note 6: Cash, Cash Equivalents, Restricted Cash and Short-Term Deposits
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Cash and cash equivalents
1,995 9,210
Current – Short-term deposits
55,615 56,572
Current – Restricted cash
- 132
57,610 65,914
Non- current – Restricted cash
16,331 18,991
Cash at bank earns interest at floating rates based on daily deposit rates.
Cash deposits are made for varying periods up to three months, depending on the immediate cash requirements of the
Group, and earn interest at the respective commercial short-term deposit rates which is recognised as cash and cash
equivalents.
Short-term deposits are made longer than three months and shorter than one year.
Performance bonds have been issued by a bank on behalf of the Group in respect of Western Australian mining tenements.
The Group has indemnified the bank against any loss arising from the performance bonds and the indemnity is secured
against cash deposits. Those are recognised as restricted cash.
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(i) Reconciliation to Cash Flow Statement
For the purposes of the Statement of Cash Flow, cash and cash equivalents comprise cash on hand and at bank and
short-term deposits, net of secured short-term deposits. Cash and cash equivalents as shown in the Statement of Cash
Flow is:
Consolidated
2015
$’000
2014
$’000
Cash, cash equivalents, restricted cash and short-term deposits 73,941 84,905
Less: Short-term Deposit (55,615) (56,572)
Less: Restricted cash not available for use (16,331) (19,123)
Cash and cash equivalents as per statement of cash flow 1,995 9,210
(ii) Reconciliation of Loss for the Year to Net Cash Flows from Operating Activities
Consolidated
2015
$’000
2014
$’000
Net loss for the year (2,830) (23,370)
Depreciation expense 1,288 2,300
Gain from disposal of non-current assets - (1,304)
Asset impairment - 13,785
Loss on disposal of tenements and plant and equipment 395 3,484
Finance costs/(income) 770 922
Change in fair value of financial assets 97 106
(Increase)/decrease in assets:
Restrict cash 2,792 (922)
Current receivables 879 (421)
Increase/(decrease) in liabilities
Current payables (1,339) 203
Other liabilities (392) (1,085)
Provisions (1,658) (2,506)
Net cash generated / (used) in operating activities 2 (8,808)
(iii) Non Cash Financing and Investing Activities Transactions
The Company did not have any transactions in this category during the year ended 31 December 2015 and 2014
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Note 7: Current Trade and Other Receivables
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Interest receivable 405 768
Other receivables 743 1,259
1,148 2,027
An allowance for doubtful debts is made when there is objective evidence that a trade receivable is impaired. Other
receivables decreased by $300,000 as a result of an adjustment to the sale price of the former Crescent Gold Laverton
Mine Camp.
Note 8: Inventories
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Stores and consumables 1,293 1,293
1,293 1,293
Note 9: Plant and Equipment
Non-current Furniture &
fittings ‘$000
Plant & Equipment
‘$000
Mill assets ‘$000
Construction in progress
‘$000
Motor Vehicles
‘$000
Total ‘$000
At 31 December 2014
Cost 2,004 6,834 32,796 8,000 599 50,233
Accumulated depreciation (1,758) (4,448) (17,631) - (424) (24,261)
Impairment loss (13) (25) (13,165) (8,000) (50) (21,253)
Net book amount 233 2,361 2,000 - 125 4,719
Year ended 31 December 2015
Opening net book amount 233 2,361 2,000 - 125 4,719
Additions 7 42 - - - 49
Depreciation expense (149) (537) (540) - (62) (1,288)
Closing book amount 91 1,866 1,460 - 63 3,480
At 31 December 2015
Cost 2,011 6,876 32,796 8,000 599 50,282
Accumulated depreciation (1,907) (4,985) (18,171) - (486) (25,549)
Impairment loss (13) (25) (13,165) (8,000) (50) (21,253)
Net book amount 91 1,866 1,460 - 63 3,480
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Non-current Furniture &
fittings ‘$000
Plant & Equipment
‘$000
Mill assets ‘$000
Construction in progress
‘$000
Motor Vehicles
‘$000
Total ‘$000
At 31 December 2013
Cost 2,138 16,027 39,811 8,000 551 66,527
Accumulated depreciation (1,500) (6,233) (20,967) - (330) (29,030)
Impairment loss - (5,872) (11,510) (8,000) - (25,382)
Net book amount 638 3,922 7,334 - 221 12,115
Year ended 31 December 2014
Opening net book amount 638 3,922 7,334 - 221 12,115
Reclassifications between Plant and Equipment
(158) (1,017) 1,070 - 105 -
Balance after adjustment 480 2,905 8,404 - 326 12,115
Additions 17 - - - - 17
Depreciation expense (245) (539) (1,352) - (164) (2,300)
Disposals (19) (5) (1,686) - (37) (1,747)
Impairment loss - - (3,366) - - (3,366)
Closing book amount 233 2,361 2,000 - 125 4,719
At 31 December 2014
Cost 2,004 6,834 32,796 8,000 599 50,233
Accumulated depreciation (1,758) (4,448) (17,631) - (424) (24,261)
Impairment loss (13) (25) (13,165) (8,000) (50) (21,253)
Net book amount 233 2,361 2,000 - 125 4,719
The mill assets of the Group were shut down from operation in July 2013 and have been under care and maintenance
since then.
Note 10: Exploration and Evaluation Assets
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Exploration and Evaluation Expenditure:
At Cost 157,791 150,439
Less: Accumulated Impairment (107,178) (107,178)
Net Book Value 50,613 43,261
Movement Summary:
The value of the Group’s interest in exploration expenditure is dependent upon:
- the continuance of the Group’s rights to tenure of the areas of interest;
- the results of future exploration;
- the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale; and
- no significant changes in laws and regulations that greatly impact the Group’s ability to maintain tenure.
Carrying amount at beginning of the year 43,261 37,059
plus – exploration expenditure 7,747 8,292
less – write off of tenements allowed to lapse, dropped or sold (395) (2,090)
Carrying amount at end of the year 50,613 43,261
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Note 11: Provisions
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Current
Employee benefits
Balance at the beginning of the year 358 270
(Decrease) / Increase in the year (33) 88
Balance at the year end 325 358
Provision for onerous electricity contract
Balance at the beginning of the year 2,134 1,866
(Decrease) / Increase in the year (2,108) 268
Balance at the year end 26 2,134
351 2,492
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Non-current
Employee benefits
Balance at the beginning of the year 68 433
(Decrease) / Increase in the year (61) (365)
Balance at the year end 7 68
Provision for onerous electricity contract
Balance at the beginning of the year - 2,773
Decrease in the year - (2,773)
Balance at the year end - -
Asset Retirement Obligation (“ARO”)
Balance at the beginning of the year 25,486 21,797
Increase in the year 623 3,689
Balance at the year end 26,109 25,486
26,116 25,554
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Note 12: Issued Capital and Reserves
Authorised Capital
The Company does not have an Authorised Capital and there is no par value for ordinary shares.
(a) Ordinary shares
Issued capital
No. of shares $’000
As at 31 December 2013 and 31 December 2014 9,137,375,877 427,167
Share consolidation as at 30 June 2015 (8,954,627,312) -
As at 31 December 2015 182,748,565 427,167
In May 2015, Focus Minerals Ltd consolidated 9,137,375,877 fully paid ordinary shares into 182,748,565 on a 1 for 50 basis.
Share Issue Details
There were no shares issued during the past two years.
Voting Entitlements
At each shareholder’s meeting each ordinary share is entitled to one vote on the calling of a poll, otherwise each
shareholder is entitled to one vote on a show of hands.
(b) Capital Management
Management controls the capital of the Group in order to ensure the Group can fund its operations; continue as a going
concern and ensure compliance with banking covenants. The Group’s debt and capital includes ordinary share capital and
financial liabilities supported by financial assets and cash and cash equivalents. There are no externally imposed capital
requirements. Management effectively manages the Group’s capital by assessing the Group’s financial risks, adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management of
debt levels, distributions to shareholders and share issues.
(c) Reserves
Consolidated
31 December 31 December
2015
$’000
2014
$’000
Acquisition reserve (7,178) (7,178)
Share option reserve 183 183
(6,995) (6,995)
The acquisition reserve resulted from acquisition of Focus Minerals (Laverton) Pty Ltd.
The share option reserve arises on the grant of share options. Amounts are transferred out of the reserve and into issued
capital when the options are exercised.
(d) Dividends
No dividends have been paid or provided for during the year ended 31 December 2015 (the year ended 31 December
2014: Nil).
(e) Options Options Issued
No options were issued in the year ended 31 December 2015 (year ended 31 December 2014: Nil).
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Options Exercised
There were no options exercised during the year (the year ended 31 December 2014: Nil).
Options Lapsed
During the year ended 31 December 2015, there were no options expired (the year ended 31 December 2014: Nil).
Options Outstanding
As at 31 December 2015 and 31 December 2015, details of unissued ordinary shares under options are as follows:
Issuing Entity Grant date Number of
Options
Exercise Price
Dollar per Share Expiry Date
Focus Minerals Ltd 8 April 2013 300,000 2.50 28/02/2016
Total Options on issue 300,000
Note 13: Financial Instruments
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, and short-term
investments, accounts receivable and payable, convertible notes and derivatives.
The main purpose of non-derivative financial instruments is to raise finance for group operations.
Derivatives are used by the Group from time to time for hedging purposes such as forward gold sales agreements. The
Group does not speculate in the trading of derivative instruments.
Treasury Risk Management
Risks are reviewed by the Audit and Business Risk Committee which consists of non-executive directors and senior staff
by invitation. This includes the analysis of financial risk exposure and to evaluate treasury management strategies in the
context of the most recent economic conditions and forecasts.
The committee’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets,
whilst minimising potential adverse effects on financial performance.
The Audit and Business Risk Committee operates under policies approved by the board of directors. Risk management
policies are reviewed and approved by the Board on a regular basis. These include the use of hedging derivative
instruments, credit policies and future cash flow requirements.
Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are market risk (including interest rate risk and
price risk), credit risk and liquidity risk.
Interest Rate Risk
The Company’s exposure to risks of changes in market interest rates relates primarily to the Company cash balances.
Credit Risk The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised
financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement
of financial position and notes to the financial statements.
Credit risk is managed on a group basis and reviewed regularly by the finance department. It arises from exposures to
approved customers as well as deposits with financial institutions.
The Audit and Business Risk Committee monitors credit risk by actively assessing the rating quality and liquidity of counter parties:
only approved banks and financial are utilised;
all potential customers are rated for credit worthiness taking into account their size, market position and financial
standing.
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The Group currently holds its cash and cash equivalents with various financial institutions, all of which hold a credit rating
of AA. The Group believes the credit risk exposure to these counterparties is manageable.
Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the contract to meet
their obligations.
Liquidity Risk
The Group manages liquidity risk by monitoring forecast project and operating cash flows and ensuring that a minimum
level of uncommitted cash is available for immediate use and consists of cash on deposit and/or utilised borrowing facilities.
At the end of the year the Group held deposits at call of $65.8 million (December 2013: $81.2 million) that are expected to
readily generate cash inflows for managing liquidity risk.
Maturities of Financial Liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities for non-derivative financial liabilities.
Contractual maturities of
financial liabilities
Less
than 6
months
6-12
months
Between 1
and 2
years
Between
2 and 5
years
Over
5
years
Total
contractual
cash flow
Carrying
amount
$’000 $’000 $’000 $’000 $’000 $’000 $’000
At 31 December 2015
Non-derivatives
Trade payables 260 - - 81 - 341 341
At 31 December 2014
Non-derivatives
Trade payables 662 - - - - 662 662
Fair Value Measurements
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
purposes. The disclosure in the table below is based on the following fair value measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),
(b) Inputs other than quoted prices included within level that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (level 2), and
(c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3)
The following table presents the Group’s financial assets and liabilities measured and recognised at fair value as at 31 December 2015 and 31 December 2014:
At 31 December 2015 Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Assets
Equity securities 150 - - 150
Total Assets 150 - - 150
Liabilities - - - -
At 31 December 2014 Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
Assets
Equity securities 247 - - 247
Total Assets 247 - - 247
Liabilities - - - -
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Aggregate fair values and carrying values of financial assets and financial liabilities at balance date.
31 December 2015 31 December 2014
Consolidated Carrying
Amount
$’000
Net
Fair Value
$’000
Carrying
Amount
$’000
Net
Fair Value
$’000
Financial assets
Cash and cash equivalents 1,995 1,995 9,210 9,210
Short-term deposit 55,615 55,615 56,572 56,572
Restricted cash 16,331 16,331 19,123 19,123
Other financial assets 150 150 247 247
Trade and other receivables 1,148 1,148 2,027 2,027
Total 75,239 75,239 87,179 87,179
Trade and other payables 341 341 662 662
Total 341 341 662 662
Sensitivity Analysis
Interest Rate Analysis
At 31 December 2015, the Group had $16.331 million invested in security deposits and performance bonds and $55.615
million in cash and cash equivalents and short-term deposit. A 1% increase / (decrease) in the interest rate would impact
the interest earned by $719,460/ ($719,460) respectively.
Note 14: Commitments and Contingencies
Operating Lease Commitments – Group as Lessee
The Group has entered into commercial leases on certain office and regional residential accommodation. These leases
has a life of one to five year with renewal options included in some lease contracts. Future minimum rentals payable under
non-cancellable operating leases as at 31 December 2015 are as follows:
Consolidated
31 December 31 December
Office Accommodation 2015
$’000
2014
$’000
Within one year 295 275
After one year but not more than five years 384 619
Total 679 894
Finance Lease and Hire Purchase Commitments – Group as Lessee
The Group had finance leases for various items of plant and machinery. All leases have been closed out in 2015.
Future minimum lease payments under previous finance leases together with the present value of the net minimum lease
payments are as follows:
31 December 2015 31 December 2014
Minimum
lease
payments
$’000
Present value of
lease
payments
$’000
Minimum
lease
payments
$’000
Present value of
lease
payments
$’000
CONSOLIDATED
Within one year - - 160 160
Total minimum lease payments - - 160 160
Less amounts representing finance charges - - - -
Present value of minimum lease payments - - 160 160
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Mining tenement expenditure commitments
As at 31 December 2015, the Group has committed, under tenement landholding conditions, to spend a minimum of $3.776 million per annum (31 December 2014: $4.205 million) of which $1.598 million (31 December 2014: $1.652 million) relates to Coolgardie and $2.178 million (31 December 2014: $2.553 million) relates to Laverton on mining and exploration tenements held by the Group.
Contingent Liability
There are no contingent liabilities as at 31 December 2015 (31 December 2014: Nil).
Note 15: Controlled Entities
The consolidated financial statements include the financial statements of Focus Minerals Ltd and the subsidiaries listed
below:
Name Country of
Incorporation % Equity Interest
31 December
2015
31 December
2014
Austminex Pty Ltd Australia 100% 100%
Focus Operation Pty Ltd Australia 100% 100%
Focus Minerals (Laverton) Pty Ltd Australia 100% 100%
Austminex Pty Ltd will be deregistered in early 2016
Note 16: Parent Entity
The parent company throughout the year ended 31 December 2015 was Focus Minerals Limited.
Parent Entity
2015 2014
Results of the parent entity $’000 $’000
Loss for the year (3,868) (14,680)
Other comprehensive income - -
Total comprehensive loss for the year (3,868) (14,680)
Financial position of parent entity at year end
Current assets 57,345 66,716
Total assets 73,634 77,726
Current Liabilities 428 591
Total liabilities 434 659
Total equity of parent entity comprising of:
Share capital 427,167 427,167
Option reserve 182 182
Accumulative losses (354,149) (350,281)
Total equity 73,200 77,068
Contingent Liability
There are no contingent liabilities as at 31 December 2015 (31 December 2014: Nil).
Operating Lease Commitments – Company as lessee
Operating Lease Commitments in the parent entity are same as group.
Ultimate Controlling Entity
The ultimate controlling entity at 31 December 2015 and 2014 was Shandong Gold Group Co., Ltd which owned 49.35%
(31 December 2014: 49.35%) of the company’s shares.
Financial Support for controlled entities.
The parent entity Focus Minerals Ltd is providing and will continue to provide financial support to all its controlled entities.
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Mining tenement expenditure commitment There is no Mining tenement expenditure commitment is the parent entity as at 31 December 2015 (31 December 2014: Nil). Note 17: Related Party Disclosure
Subsidiaries
Interests in subsidiaries are set out in Note 15.
Key Management Personnel
2015 2014
$’000 $’000
Short-term employee benefits 979,728 936,273
Post-employment benefits 93,075 69,694
1,072,803 1,005,967
Detailed disclosures relating to key management personnel are set out in the Directors’ Report
Terms and Conditions of Transactions with Related Parties
Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on
normal commercial terms.
Transactions and Balances with Related Parties
Mr Fahey is a Director of CSA Global, which provided technical consulting services to the Group. Technical services
provided by CSA Global for the year ended 31 December 2015 totalled $21,802 (year ended 31 December 2014: $52,840).
Note 18: Auditors’ Remuneration
The auditors of Focus Minerals Limited are PricewaterhouseCoopers.
2015 2014
$ $
Amounts received or due and receivable by PricewaterhouseCoopers
An audit or review of the financial report of the entity and any other
entity in the consolidated group 55,000 100,000
Other services in relation to the entity and any other entity in the
consolidated group:
Accounting advice - 25,000
Total 55,000 125,000
Note 19: Significant Events after Balance Date
There are not been any matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity in future period.
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Directors’ Declaration
In the directors’ opinion:
1. The financial statements and notes, as set out on pages 32 to 64 are in accordance with the Corporations Act
2001, including:
a. Companying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
b. Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of its
performance for the financial year ended on that date, and
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
The directors have been given the declarations by the Interim Chief Executive Officer and Chief Financial Officer required
by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
Dianfei Pei
Chairman of the Board
31 March 2016
Jinan, Shandong, China
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Independent Auditor’s Report
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Shareholder Information Additional information required by the Australian Securities Exchange Listing Rules and not disclosed elsewhere in this report. The information was prepared based on share registry information processed up to the 8th of April 2016. Spread of Holders
Spread of Holdings Shareholders
1 - 1,000 1,660 1,001 - 5,000 2,928 5,001 - 10,000 694
10,001 - 100,000 678 100,001 - and over 53
Total Number of Holders 6,013
Number of shareholders holding less than a marketable parcel: 2,262 shareholders each hold less than 1,471 shares. Substantial Shareholders
As at 8 April 2016 the following had notified the Company as being substantial shareholders: Shandong Gold International Mining Corporation Limited 90,519,953 ordinary shares Lloyd Miller III 23,714,935 ordinary shares Voting Rights
All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights. Statement of Quoted Securities
Quoted on the Australian Securities Exchange are 182,748,565 ordinary shares. Twenty Largest Shareholders of Each Class of Quoted Securities Ordinary Fully Paid Shares at 8 April 2016
No. Shareholder Name Number of
Shares Percentage of Capital
1 SHANDONG GOLD INTERNATIONAL MINING CORPORATION LIMITED 90,039,954 49.27
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 26,615,380 14.56
3 JP MORGAN NOMINEES AUSTRALIA LTD 15,597,283 8.53
4 NATIONAL AUSTRALIA TRUSTEES LIMITED <12849500 A/C> 4,920,958 2.69
5 CITICORP NOMINEES PTY LTD 2,073,891 1.13
6 ABN AMRO CLEARING SYDNEY NOMINEES P/L <CUSTODIAN A/C> 1,460,695 0.80
7 MR GRAHAM PAUL ELLIS 1,000,000 0.55
8 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 782,116 0.43
9 PETER ERMAN PTY LIMITED <SUPERANNUATION FUND A/C> 550,544 0.30
10 KAHUNA CLOTHING AND TRADING PTY LTD <UTTLEYMOORE S/F A/C> 500,500 0.27
11 BROADARROW GOLDMINES PTY LTD 362,325 0.20
12 MRS RITA MAY GODFREY 353,320 0.19
13 MR CHRISTOPHER MICHAEL DAHL 300,000 0.16
14 LUJETA PTY LTD <THE MARGARET ACCOUNT> 300,000 0.16
15 VALLUGA PTY LTD <G E UNDERWOOD S/F A/C> 300,000 0.16
16 BRISPOT NOMINEES PTY LTD <HOUSE HEAD NOMINEE NO 1 A/C> 289,541 0.16
17 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 252,489 0.14
18 NATIONAL NOMINEES LIMITED <DB A/C> 240,492 0.13
19 MR DAVID DOSTAL 220,000 0.12
20 MR DAVID TEOH 218,501 0.12
Total
146,378,299
80.10
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Interest in Mining Tenements Coolgardie Gold Project - Focus Minerals Ltd and its 100% subsidiaries
State Project Tenement Status Interest State Project Tenement Status Interest
WA BAYLEYS G15/0007 Live 100% WA LONDONDERRY P15/5972 Pending 100%
WA BAYLEYS M15/0630 Live 100% WA LORD BOB M15/0385 Live 100%
WA BAYLEYS M15/1433 Live 100% WA LORD BOB M15/0664 Live 100%
WA BAYLEYS M15/1788 Live 100% WA LORD BOB M15/1789 Live 100%
WA BAYLEYS P15/4912 Live 100% WA LORD BOB P15/4829 Live 100%
WA BAYLEYS P15/5717 Live 100% WA LORD BOB P15/4916 Live 100%
WA BONNIE VALE M15/0277 Live 100% WA LORD BOB P15/4917 Live 100%
WA BONNIE VALE M15/0365 Live 100% WA LORD BOB P15/4950 Live 100%
WA BONNIE VALE M15/0595 Live 100% WA LORD BOB P15/4951 Live 100%
WA BONNIE VALE M15/0662 Live 100% WA LORD BOB P15/4952 Live 100%
WA BONNIE VALE M15/0711 Live 100% WA LORD BOB P15/4953 Live 100%
WA BONNIE VALE M15/0770 Live 100% WA LORD BOB P15/4956 Live 100%
WA BONNIE VALE M15/0852 Live 100% WA LORD BOB P15/5550 Live 100%
WA BONNIE VALE M15/0857 Live 100% WA LORD BOB P15/5712 Pending 100%
WA BONNIE VALE M15/0877 Live 100% WA LORD BOB P15/5731 Live 100%
WA BONNIE VALE M15/0981 Live 100% WA LORD BOB P15/5733 Live 100%
WA BONNIE VALE M15/1384 Live 100% WA LORD BOB P15/5735 Live 100%
WA BONNIE VALE M15/1444 Live 100% WA BAYLEYS L15/0034 Live 100%
WA BONNIE VALE M15/1760 Live 100% WA BAYLEYS L15/0122 Live 100%
WA BONNIE VALE P15/5155 Live 100% WA BAYLEYS L15/0161 Live 100%
WA BONNIE VALE P15/5156 Live 100% WA BAYLEYS L15/0164 Live 100%
WA BONNIE VALE P15/5158 Live 100% WA BAYLEYS L15/0186 Live 100%
WA BONNIE VALE P15/5159 Live 100% WA BONNIEVALE L15/0126 Live 100%
WA BONNIE VALE P15/5190 Live 100% WA BONNIEVALE L15/0127 Live 100%
WA BONNIE VALE P15/5238 Live 100% WA BONNIEVALE L15/0130 Live 100%
WA BONNIE VALE P15/5253 Live 100% WA BONNIEVALE L15/0200 Live 100%
WA BONNIE VALE P15/5254 Live 100% WA BONNIEVALE L15/0211 Live 100%
WA BONNIE VALE P15/5255 Live 100% WA ML - GUNGA L15/0088 Live 100%
WA BONNIE VALE P15/5704 Pending 100% WA ML - GUNGA L15/0090 Live 100%
WA BONNIE VALE P15/5713 Live 100% WA ML - GUNGA L15/0095 Live 100%
WA BONNIE VALE P15/5714 Live 100% WA ML - GUNGA L15/0096 Live 100%
WA BURBANKS P15/5939 Pending 100% WA ML - GUNGA L15/0114 Live 100%
WA COOLGARDIE P15/5946 Live 100% WA ML - GUNGA L15/0116 Live 100%
WA COOLGARDIE P15/5949 Live 100% WA ML - GUNGA L15/0119 Live 100%
WA COOLGARDIE P15/5995 Pending 100% WA ML - GUNGA L15/0283 Live 100%
WA COOLGARDIE P15/6002 Pending 100% WA ML - LORD BOB L15/0051 Live 100%
WA COOLGARDIE P15/6006 Pending 100% WA ML - LORD BOB L15/0059 Live 100%
WA GUNGA M15/1341 Live 100% WA ML - LORD BOB L15/0063 Live 100%
WA GUNGA M15/1357 Live 100% WA ML - LORD BOB L15/0077 Live 100%
WA GUNGA M15/1358 Live 100% WA ML - LORD BOB L15/0078 Live 100%
WA GUNGA M15/1359 Live 100% WA ML - NEPEAN L15/0027 Live 100%
WA GUNGA P15/5256 Live 100% WA ML - NEPEAN L15/0028 Live 100%
WA GUNGA P15/5702 Pending 100% WA ML - NEPEAN L15/0179 Live 100%
WA GUNGA P15/5703 Pending 100% WA ML - NEPEAN L15/0193 Live 100%
WA LAKE COWAN E15/0986 Live 100% WA ML - NEPEAN L15/0194 Live 100%
WA LONDONDERRY P15/5963 Pending 100% WA ML - NEPEAN L15/0294 Live 100%
WA LONDONDERRY P15/5964 Pending 100% WA ML - NORRIS L15/0071 Live 100%
WA LONDONDERRY P15/5965 Pending 100% WA ML - NORRIS L15/0168 Live 100%
WA LONDONDERRY P15/5966 Pending 100% WA ML - NORRIS L15/0169 Live 100%
WA LONDONDERRY P15/5967 Pending 100% WA ML - NORRIS L15/0170 Live 100%
WA LONDONDERRY P15/5968 Pending 100% WA ML - NORRIS L15/0171 Live 100%
WA LONDONDERRY P15/5969 Pending 100% WA ML - NORRIS L15/0172 Live 100%
WA LONDONDERRY P15/5970 Pending 100% WA ML - NORRIS L15/0173 Live 100%
WA LONDONDERRY P15/5971 Pending 100% WA ML - NORRIS L15/0174 Live 100%
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State Project Tenement Status Interest State Project Tenement Status Interest
WA ML - NORRIS L15/0175 Live 100% WA NORRIS P15/5756 Live 100%
WA ML - THREE MILE HILL L15/0042 Live 100% WA NORRIS P15/5807 Live 100%
WA ML - THREE MILE HILL L15/0123 Live 100% WA THREE MILE HILL M15/0150 Live 100%
WA ML - THREE MILE HILL L15/0177 Live 100% WA THREE MILE HILL M15/0154 Live 100%
WA NEPEAN M15/0709 Live 100% WA THREE MILE HILL M15/0636 Live 100%
WA NEPEAN M15/1809 Live 100% WA THREE MILE HILL M15/0645 Live 100%
WA NEPEAN P15/5519 Live 100% WA THREE MILE HILL M15/0781 Live 100%
WA NEPEAN P15/5574 Live 100% WA THREE MILE HILL M15/0827 Live 100%
WA NEPEAN P15/5575 Live 100% WA THREE MILE HILL M15/1432 Live 100%
WA NEPEAN P15/5576 Live 100% WA THREE MILE HILL M15/1434 Live 100%
WA NEPEAN P15/5625 Live 100% WA THREE MILE HILL P15/4913 Live 100%
WA NEPEAN P15/5626 Live 100% WA THREE MILE HILL P15/4926 Live 100%
WA NEPEAN P15/5629 Live 100% WA TINDALS M15/0023 Live 100%
WA NEPEAN P15/5738 Live 100% WA TINDALS M15/0237 Live 100%
WA NEPEAN P15/5739 Live 100% WA TINDALS M15/0410 Live 100%
WA NEPEAN P15/5740 Live 100% WA TINDALS M15/0411 Live 100%
WA NEPEAN P15/5741 Live 100% WA TINDALS M15/0412 Live 100%
WA NEPEAN P15/5742 Live 100% WA TINDALS M15/0646 Live 100%
WA NEPEAN P15/5743 Live 100% WA TINDALS M15/0660 Live 100%
WA NEPEAN P15/5749 Live 100% WA TINDALS M15/0675 Live 100%
WA NEPEAN P15/5750 Live 100% WA TINDALS M15/0958 Live 100%
WA NORRIS M15/0384 Live 100% WA TINDALS M15/0966 Live 100%
WA NORRIS M15/0391 Live 100% WA TINDALS M15/1114 Live 100%
WA NORRIS M15/0515 Live 100% WA TINDALS M15/1262 Live 100%
WA NORRIS M15/0761 Live 100% WA TINDALS M15/1293 Live 100%
WA NORRIS M15/0791 Live 100% WA TINDALS M15/1294 Live 100%
WA NORRIS M15/0871 Live 100% WA TINDALS M15/1461 Live 100%
WA NORRIS M15/1153 Live 100% WA TINDALS P15/4933 Live 100%
WA NORRIS M15/1422 Live 100% WA TINDALS P15/4934 Live 100%
WA NORRIS M15/1793 Live 100% WA TINDALS P15/4935 Live 100%
WA NORRIS P15/5241 Live 100% WA TINDALS P15/4941 Live 100%
WA NORRIS P15/5522 Live 100% WA TINDALS P15/4943 Live 100%
WA NORRIS P15/5527 Live 100% WA TINDALS P15/4945 Live 100%
WA NORRIS P15/5528 Live 100% WA TINDALS P15/4947 Live 100%
WA NORRIS P15/5729 Live 100% WA TINDALS P15/5046 Live 100%
WA NORRIS P15/5730 Live 100% WA TINDALS P15/5048 Live 100%
WA NORRIS P15/5732 Live 100% WA TINDALS P15/5464 Live 100%
WA NORRIS P15/5734 Live 100% WA WATER GWL160936 Live 100%
WA NORRIS P15/5736 Live 100% WA WATER GWL166660 Live 100%
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Laverton Gold Project - Focus Minerals (Laverton) Ltd
State Project Tenement Status Interest State Project Tenement Status Interest
WA BARRICK E38/1642 Live 100% WA INFRASTRUCTURE L38/0052 Live 100%
WA BARRICK E38/1725 Live 100% WA INFRASTRUCTURE L38/0053 Live 100%
WA BARRICK E38/2032 Live 100% WA INFRASTRUCTURE L38/0054 Live 100%
WA BARRICK L38/0092 Live 100% WA INFRASTRUCTURE L38/0055 Live 100%
WA BARRICK L38/0101 Live 100% WA INFRASTRUCTURE L38/0056 Live 100%
WA BARRICK M38/0037 Live 100% WA INFRASTRUCTURE L38/0057 Live 100%
WA BARRICK M38/0038 Live 100% WA INFRASTRUCTURE L38/0063 Live 100%
WA BARRICK M38/0049 Live 100% WA INFRASTRUCTURE L38/0075 Live 100%
WA BARRICK M38/0101 Live 100% WA INFRASTRUCTURE L38/0076 Live 100%
WA BARRICK M38/0159 Live 100% WA INFRASTRUCTURE L38/0078 Live 100%
WA BARRICK M38/0342 Live 100% WA INFRASTRUCTURE L38/0108 Live 100%
WA BARRICK M38/0363 Live 100% WA INFRASTRUCTURE L38/0120 Live 100%
WA BARRICK M38/0364 Live 100% WA INFRASTRUCTURE L38/0152 Live 100%
WA BARRICK M38/0535 Live 100% WA INFRASTRUCTURE L38/0153 Live 100%
WA BARRICK M38/0693 Live 100% WA INFRASTRUCTURE L38/0160 Live 100%
WA BARRICK P38/3500 Live 100% WA INFRASTRUCTURE L38/0163 Live 100%
WA BARRICK P38/3501 Live 100% WA INFRASTRUCTURE L38/0164 Live 100%
WA BARRICK P38/3667 Live 100% WA INFRASTRUCTURE L38/0165 Live 100%
WA BARRICK P38/3671 Live 100% WA INFRASTRUCTURE L38/0166 Live 100%
WA BLACK SWAN JV E38/1869 Live 64% WA INFRASTRUCTURE L38/0173 Live 100%
WA BLACK SWAN JV P38/3608 Live 64% WA INFRASTRUCTURE L38/0177 Live 100%
WA BURTVILLE E38/3050 Live 100% WA INFRASTRUCTURE L38/0179 Live 100%
WA BURTVILLE E38/3051 Live 100% WA INFRASTRUCTURE L38/0183 Live 100%
WA BURTVILLE G38/0033 Live 100% WA INFRASTRUCTURE L39/0124 Live 100%
WA BURTVILLE E38/3088 Pending 100% WA INFRASTRUCTURE L39/0214 Live 100%
WA CENTRAL LAVERTON E38/1349 Live 64% WA JASPER HILLS M39/0138 Live 100%
WA CENTRAL LAVERTON E38/1861 Live 100% WA JASPER HILLS M39/0139 Live 100%
WA CENTRAL LAVERTON E38/1864 Live 100% WA JASPER HILLS M39/0185 Live 100%
WA CENTRAL LAVERTON E38/1866 Live Au Fe WA JASPER HILLS M39/0262 Live 100%
WA CENTRAL LAVERTON E38/2143 Live 100% WA LAVERTON L38/0231 Live 100%
WA CENTRAL LAVERTON G38/0020 Live 100% WA LAVERTON P38/4091 Live 100%
WA CENTRAL LAVERTON M38/0264 Live 100% WA LAVERTON P38/4099 Live 100%
WA CENTRAL LAVERTON M38/0318 Live 100% WA LAVERTON P38/4100 Live 100%
WA CENTRAL LAVERTON M38/0376 Live 100% WA LAVERTON P38/4102 Live 100%
WA CENTRAL LAVERTON M38/0377 Live 100% WA LAVERTON P38/4163 Live 100%
WA CENTRAL LAVERTON M38/0387 Live 100% WA LAVERTON-MONEY M38/0547 Live 100%
WA CENTRAL LAVERTON M38/0401 Live 100% WA LAVERTON-MONEY P38/3504 Live 100%
WA CENTRAL LAVERTON M38/0425 Live Au Fe WA LAVERTON-MONEY P38/3505 Live 100%
WA CENTRAL LAVERTON M38/0505 Live Au Fe WA LAVERTON-MONEY P38/3506 Live 100%
WA CENTRAL LAVERTON M38/0507 Live 100% WA MEROLIA JV M38/0073 Live 91%
WA CENTRAL LAVERTON M38/1032 Live 100% WA MEROLIA JV M38/0089 Live 91%
WA CENTRAL LAVERTON M38/1042 Live 100% WA MT WELD E38/2862 Live 100%
WA CENTRAL LAVERTON P38/3691 Live 100% WA MT WELD E38/2872 Live 100%
WA CENTRAL LAVERTON P38/3692 Live 100% WA MT WELD E38/2873 Live 100%
WA EAST LAVERTON M38/0008 Live 100% WA WEST LAVERTON M38/0143 Live 100%
WA EAST LAVERTON M38/0261 Live 100% WA WEST LAVERTON M38/0236 Live 100%
WA EAST LAVERTON P38/3611 Live 100% WA WEST LAVERTON M38/0270 Live 100%
WA EAST LAVERTON P38/3612 Live 100% WA WEST LAVERTON M38/0345 Live 100%
WA INFRASTRUCTURE G38/0024 Live 100% WA WEST LAVERTON M38/1187 Live 100%
WA INFRASTRUCTURE G38/0025 Live 100% WA WATER GWL154255 Live 100%
WA INFRASTRUCTURE L38/0034 Live 100% WA WATER GWL160209 Live 100%
WA WATER GWL160210 Live 100%
WA WATER GWL160685 Live 100%
WA WATER GWL172290 Live 100%
Tenement Abbreviations: E = Exploration Licence EL = Exploration Licence P = Prospecting Licence M = Mining Lease L = Miscellaneous Licence G = General Purpose Licence
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ROYALTY AGREEMENTS
Coolgardie Gold Project The Parent Entity has entered into the following deeds of assignment for royalty agreements relating to the Coolgardie Gold Project. The material terms of these royalty agreements are set out in the table below:
Tenements Royalty
M15/645 (portion of) $1.00/tonne crushed and treated
M15/646, M15/660, M15/1114, P15/4933, P15/4934, M15/1262, P15/4947 & P15/4935
$0.25/tonne mined and treated (after 2,500,000 tonnes or ore have been mined and treated)
P15/4913 (portion of) $1.00/tonne mined and treated
P15/646 (portion of) 2% of all future gold production
M15/781 & M15/827 0.5% NSR
M15/770, P15/5155, P15/5156, M15/852, M15/857, M15/981, M15/1760, M15/365, M15/662, M15/711 & M15/1384 2.5% NSR
M15/958, M15/1114, M15/646 (portion of) & M15/660 (portion of)
$10/ounce gold produced(after first 100,000 ounces produced) & 3% NSR on all other metals
M15/958 (portion of) $0.75/dry tonne mined and treated
M15/1423 $1/tonne mined and treated
M15/1357 & M15/1358 1.5% NSR on gold & 1% NSR on all other metals
M15/675 $1/tonne mined and treated
M15/958 (portion of) $1.50/tonne mined and treated
M15/237, P15/5209 & P15/5464 1.5% NSR
M15/1341 & M15/1359 2.5% NSR on gold & 1% NSR on all other metals
P15/4907 & M15/1461 $1.00/tonne mined and treated
E15/986 2.5% NSR
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ROYALTY AGREEMENTS Continued
Laverton Gold Project The Parent Entity has entered into the following deeds of assignment for royalty agreements relating to the Laverton Gold Project. The material terms of these royalty agreements are set out in the table below:
Tenements Royalty
M38/376 & M38/377
$1.50/BCM of ore mined between 100,000BCM and 850,000BCM M38/143 $10/ounce gold produced (after the first 50,000 ounces)
All tenements at Laverton owned by Focus Minerals (Laverton) Ltd (all tenements are listed in the "Interest in Mining Tenements" section above except those with an *)
2% NSR
M38/37, M38/38, M38/39, M38/40, M38/46, M38/48, M38/49, M38/52, E38/1966 (portion of), M38/101, M38/358, M38/535, P38/3488, P38/3489, P38/3490, P38/3491, P38/3492
$1.00/tonne mined and treated from open cut and $1.50/tonne mined and treated from underground (assuming spot gold price is fixed by the Perth Mint (SGP) is $525 (Base Price)). Each quarter the royalty is to be varied by: (i) calculating the average daily $ SGP during the quarter; (ii) subject to (iii), for each $10 that the average SGP for the quarter varies from the Base Price, there will be an increase or a reduction in the royalty of $0.10/tonne of mined and treated; (iii) the minimum royalty payable for open cut and underground will be $0.75 and $1.25 respectively
M38/1042 $1.50/tonne of ore mined and treated after 100,000 tonnes Plus $0.58/tonne ore mined and milled for first 500,000 tonnes, $0.05/tonne of ore mined and milled thereafter
M38/544 4% of gold produced up to 100,000 ounces, then 2.5% of gold produced thereafter
M38/73 3% of the gross value of gold recovered
P38/3500 & P38/3501 1.5% NSR
M38/693 $0.75/tonne ore mined
P38/3667 1% gross value of gold produced
M39/664, M39/742, M39/743, M39/862 & M39/904
1% of gross revenue received from mining operations on the tenements
P38/3610, P38/3615 (portion of), P38/3693, P38/3694, P38/3695, E38/1860 (portion of), E38/1867 (portion of, E38/2059 (portion of)
$1/BCM of ore mined and treated
All tenements within a 50km radius of Laverton township.
A quarterly fee equal to the greater of 1.25% of annual DMP tenement fees or $2,500. A quarterly mining fee relating to gold production from the tenements in a calendar year, of:
0 – 50,000oz Au: 0.20% of total gross proceeds of the relevant quarter;
50,001 – 100,000oz Au: 0.24% of the total gross proceeds of the relevant quarter;
100,001 – 150,000oz Au: 0.28% of total gross proceeds of the relevant quarter;
150,001 – 200,000oz Au: 0.33% of total gross proceeds of the relevant quarter;
>200,000oz Au: 0.40% of total gross proceeds of the relevant quarter.
Scholarship funds payable each calendar year in the amount of $10,000 where the total annual gold production is less than 100,000oz, and $20,000 if the total annual gold production is greater than 100,000oz.
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